1 Fourth Supplement dated 28 February 2020 to the Base Prospectus for the issue of Certificates dated 3 June 2019 BNP Paribas Issuance B.V. (incorporated in The Netherlands) (as Issuer) BNP Paribas (incorporated in France) (as Issuer and Guarantor) Note, Warrant and Certificate Programme This fourth supplement (the "Fourth Supplement") is supplemental to, and should be read in conjunction with, the base prospectus dated 3 June 2019 (the "Base Prospectus"), the first supplement to the Base Prospectus dated 8 August 2019 (the "First Supplement"), the second supplement to the Base Prospectus dated 30 September 2019 (the "Second Supplement") and the third supplement to the Base Prospectus dated 29 November 2019 (the "Third Supplement" and, together with the First Supplement and the Second Supplement, the "Previous Supplements"), in each case in respect of Certificates issued under the Note, Warrant and Certificate Programme (the "Programme") of BNP Paribas Issuance B.V. ("BNPP B.V."), BNP Paribas ("BNPP") and BNP Paribas Fortis Funding. The Base Prospectus and the Previous Supplements together constitute a base prospectus for the purposes of Article 5.4 of the Prospectus Directive. The "Prospectus Directive" means Directive 2003/71/EC of 4 November 2003 (as amended, including by Directive 2010/73/EU) and includes any relevant implementing measure in a relevant Member State of the European Economic Area (which, for this purpose, includes the United Kingdom and Member State is to be interpreted accordingly). The Autorité des marchés financiers (the "AMF") granted visa no. 19-241 on 3 June 2019 in respect of the Base Prospectus, visa no. 19-397 on 8 August 2019 in respect of the First Supplement, visa no. 19-463 on 30 September 2019 in respect of the Second Supplement and visa no. 19-553 on 29 November 2019 in respect of the Third Supplement. Application has been made to the AMF for approval of this Fourth Supplement in its capacity as competent authority pursuant to Article 212-2 of its Règlement Général which implements the Prospectus Directive in France. BNPP (in respect of itself and BNPP B.V.) and BNPP B.V. (in respect of itself) accept responsibility for the information contained in this Fourth Supplement, save that BNPP B.V. accepts no responsibility for the information contained in the SREP Press Release (as defined below), the press release and related presentation dated 5 February 2020, the updated disclosure relating to BNPP or the BNPP 2019 Unaudited Financial Statements (as defined below). To the best of the knowledge of BNPP and BNPP B.V. (who have taken all reasonable care to ensure that such is the case), the information contained herein is, subject as provided in the preceding sentence, in accordance with the facts and does not omit anything likely to affect the import of such information. Unless the context otherwise requires, terms defined in the Base Prospectus, as amended by the Previous Supplements, shall have the same meanings when used in this Fourth Supplement.
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1
Fourth Supplement dated 28 February 2020
to the Base Prospectus for the issue of Certificates dated 3 June 2019
BNP Paribas Issuance B.V. (incorporated in The Netherlands)
(as Issuer)
BNP Paribas (incorporated in France)
(as Issuer and Guarantor)
Note, Warrant and Certificate Programme
This fourth supplement (the "Fourth Supplement") is supplemental to, and should be read in conjunction
with, the base prospectus dated 3 June 2019 (the "Base Prospectus"), the first supplement to the Base
Prospectus dated 8 August 2019 (the "First Supplement"), the second supplement to the Base Prospectus
dated 30 September 2019 (the "Second Supplement") and the third supplement to the Base Prospectus dated
29 November 2019 (the "Third Supplement" and, together with the First Supplement and the Second
Supplement, the "Previous Supplements"), in each case in respect of Certificates issued under the Note,
Warrant and Certificate Programme (the "Programme") of BNP Paribas Issuance B.V. ("BNPP B.V."),
BNP Paribas ("BNPP") and BNP Paribas Fortis Funding.
The Base Prospectus and the Previous Supplements together constitute a base prospectus for the purposes of
Article 5.4 of the Prospectus Directive. The "Prospectus Directive" means Directive 2003/71/EC of 4
November 2003 (as amended, including by Directive 2010/73/EU) and includes any relevant implementing
measure in a relevant Member State of the European Economic Area (which, for this purpose, includes the
United Kingdom and Member State is to be interpreted accordingly). The Autorité des marchés financiers
(the "AMF") granted visa no. 19-241 on 3 June 2019 in respect of the Base Prospectus, visa no. 19-397 on 8
August 2019 in respect of the First Supplement, visa no. 19-463 on 30 September 2019 in respect of the
Second Supplement and visa no. 19-553 on 29 November 2019 in respect of the Third Supplement.
Application has been made to the AMF for approval of this Fourth Supplement in its capacity as competent
authority pursuant to Article 212-2 of its Règlement Général which implements the Prospectus Directive in
France.
BNPP (in respect of itself and BNPP B.V.) and BNPP B.V. (in respect of itself) accept responsibility for the
information contained in this Fourth Supplement, save that BNPP B.V. accepts no responsibility for the
information contained in the SREP Press Release (as defined below), the press release and related
presentation dated 5 February 2020, the updated disclosure relating to BNPP or the BNPP 2019 Unaudited
Financial Statements (as defined below). To the best of the knowledge of BNPP and BNPP B.V. (who have
taken all reasonable care to ensure that such is the case), the information contained herein is, subject as
provided in the preceding sentence, in accordance with the facts and does not omit anything likely to affect
the import of such information.
Unless the context otherwise requires, terms defined in the Base Prospectus, as amended by the Previous
Supplements, shall have the same meanings when used in this Fourth Supplement.
2
To the extent that there is any inconsistency between (i) any statement in this Fourth Supplement and (ii) any
statement in, or incorporated by reference in, the Base Prospectus, as amended by the Previous Supplements,
the statement referred to in (i) above will prevail.
References in this Fourth Supplement to paragraphs of the Base Prospectus are to the Base Prospectus as
amended by the Previous Supplements. References in this Fourth Supplement to page numbers in the Base
Prospectus are to the page numbers in the Base Prospectus without taking into account any amendments
made in the Previous Supplements.
Copies of this Fourth Supplement may be obtained free of charge at the specified offices of BNP Paribas
Securities Services, Luxembourg Branch and BNP Paribas Arbitrage S.N.C. and will be available on the
website of BNP Paribas (https://rates-globalmarkets.bnpparibas.com/gm/Public/LegalDocs.aspx) and on the
website of the AMF (www.amf-france.org).
This Fourth Supplement has been prepared in accordance with Article 16.1 of the Prospectus Directive and
pursuant to Article 212-25 of the AMF’s Règlement Général, for the purposes of giving information which
amends or is additional to the information already contained in the Base Prospectus, as amended by the
Previous Supplements.
This Fourth Supplement has been prepared for the purposes of:
(A) giving disclosure in respect of:
(i) a press release dated 12 December 2019 issued by BNP Paribas relating to the notification
by the ECB of the 2019 Supervisory Review and Evaluation Process (the "SREP Press
Release"); and
(ii) a press release and related presentation dated 5 February 2020 issued by BNP Paribas;
(B) amending the "Programme Summary in relation to this Base Prospectus" and the "Pro Forma Issue
Specific Summary of the Programme in relation to this Base Prospectus";
(C) amending the "Programme Summary in relation to this Base Prospectus (in French)" and the "Pro
Forma Issue Specific Summary of the Programme in relation to this Base Prospectus (in French)";
(D) amending the "Risks" section;
(E) incorporating by reference BNPP’s unaudited consolidated financial statements for the year ended
31 December 2019 (the "BNPP 2019 Unaudited Financial Statements"); and
(F) amending the "General Information" section.
The incorporation of the documents referred to in (A) above has been included to update the BNPP
disclosure. The amendments referred to in (B) and (C) above have been made to reflect the updated
disclosure in respect of BNPP referred to in (A), (D) and (E) above. The amendments referred to in (D)
above have been made to update the risk factors relating to BNPP. The incorporation by reference referred to
in (E) above has been made to reflect the unaudited consolidated financial statements of BNPP for the year
ended 31 December 2019. The amendments referred to in (F) above have been made to (i) update the table
of Capitalization of BNPP and the BNP Paribas Group and (ii) include a declaration concerning the
unaudited annual results of BNP Paribas for the year ending 31 December 2019 and the unaudited fourth
quarter results of BNP Paribas for the quarter ended 31 December 2019.
In accordance with Article 16.2 of the Prospectus Directive, in the case of an offer of Securities to the public,
investors who, before this Fourth Supplement is published, have already agreed to purchase or subscribe for
Securities issued under the Programme which are affected by the amendments made in this Fourth
Supplement, have the right, exercisable before the end of the period of two working days beginning with the
working day after the date of publication of this Fourth Supplement to withdraw their acceptances. This
right to withdraw shall expire by close of business on 4 March 2020.
4
TABLE OF CONTENTS
Page
SREP Press Release and Press Release and Related Presentation Dated 5 February 2020 ................................ 5 Amendments to the Programme Summary in relation to this Base Prospectus and the Pro Forma Issue
Specific Summary of the Programme in relation to this Base Prospectus ..................................................... 153 Amendments to the Programme Summary in relation to this Base Prospectus (in French) and the Pro Forma
Issue Specific Summary of the Programme in relation to this Base Prospectus (in French) ......................... 164 Amendments to the Risks section ................................................................................................................... 175 Documents Incorporated by Reference .......................................................................................................... 187 Amendments to the General Information section ........................................................................................... 188 Responsibility Statement ................................................................................................................................ 192
5
SREP PRESS RELEASE AND PRESS RELEASE AND RELATED PRESENTATION DATED 5
FEBRUARY 2020
BNP Paribas have released the following:
(i) a press release dated 12 December 2019 relating to the notification by the ECB of the 2019
Supervisory Review and Evaluation Process (the "SREP Press Release"); and
(ii) a press release and presentation dated 5 February 2020 relating to the unaudited financial
information of BNP Paribas for the fourth quarter ended 31 December 2019 and the unaudited
figures for the year ended 31 December 2019.
BNPP Classification : Internal
NOTIFICATION BY THE ECB OF THE 2019 SUPERVISORY REVIEW AND EVALUATION PROCESS (SREP)
2019 FULL YEAR RESULTS PRESS RELEASE Paris, 5 February 2020
2019: STRONG GROWTH IN INCOME THANKS TO BUSINESS DRIVE AND TRANSFORMATION
SIGNIFICANT REVENUE GROWTH – RISE IN ALL THE DIVISIONS
REVENUES: +4.9% vs. 2018
POSITIVE JAWS EFFECT IN THE THREE OPERATING DIVISIONS
OPERATING EXPENSES: +2.5% vs. 2018 COST INCOME RATIO: -1.7pt
LOW COST OF RISK 391 bps
STRONG NET INCOME2 GROWTH
NET INCOME2: €8,173m (+8.6% vs. 2018) INCREASE IN DIVIDEND PER SHARE €3.103
VERY SOLID BALANCE SHEET
CET1 RATIO: 12.1% (+40 bps vs. 01.01.19)
1. COST OF RISK/CUSTOMER LOANS AT THE BEGINNING OF THE PERIOD (IN BP); 2. NET INCOME GROUP SHARE; 3. SUBJECT TO THE APPROVAL OF THE ANNUAL GENERAL
MEETING ON 19 MAY 2020
The bankfor a changing
world
2 RESULTS AS AT 31 DECEMBER 2019
BNP PARIBAS
The Board of Directors of BNP Paribas met on 4 February 2020. The meeting was chaired by Jean Lemierre and the Board examined the Group’s results for the fourth quarter and endorsed the 2019 financial statements. STRONG GROWTH IN INCOME THANKS TO BUSINESS DRIVE AND TRANSFORMATION BNP Paribas delivered a very good overall performance this year, confirming the strength of its diversified and integrated model and its ability to create value in changing economic, technological, environmental, regulatory and societal conditions. At 44,597 million euros, revenues were up 4.9% compared to 20181. In the operating divisions, revenues rose by 5.9%, with an increase in all the divisions: +0.8% in Domestic Markets2 where the effect of the persistently low interest rate environment impacting negatively the networks in the eurozone was more than offset by the business growth, in particular in the specialised businesses; +6.9%3 in International Financial Services in connection with the business drive at Personal Finance and the very good performance of insurance and Europe-Mediterranean; and +11.6% in CIB which posted strong revenue growth with very good performance by Global Markets and Corporate Banking. The Group’s operating expenses, at 31,337 million euros, were up 2.5% compared to 2018. They included the following exceptional items: the transformation costs of the 2020 plan (744 million euros), restructuring costs4 (311 million euros) and adaptation measures5 (162 million euros for early departure plans) totalling 1,217 million euros (1,235 million euros in 2018). The operating expenses of the operating divisions rose by 3.5% compared to 2018: they were up slightly by 0.3% for Domestic Markets2 with a decrease in the networks (-0.5%) and a 4.5% increase in the specialised businesses related to business development, rose by 4.5% for International Financial Services6 to support growth, and rose by 6.1% at CIB in line with business growth. Good cost control generated a positive 2.4 point jaws effect. The jaws effect was accompanied by an improvement of the cost income ratio in each of the operating divisions thanks to the implementation, of cost saving measures for a cumulative total of 1.8 billion euros in 2019 in line with the 2020 plan launched in 2017.The related transformation costs are in line with the objectives announced. There will be no transformation costs in 2020. The Group’s gross operating income thus came in at 13,260 million euros, up 11.1%. It rose by 11.2% for the operating divisions. The cost of risk, at 3,203 million euros, rose by 439 million euros compared to 2018. At 39 basis points of outstanding customer loans, it remained at a low level due in particular to the good control of risk at origination, the low interest rate environment and the continued improvement of the credit portfolio in Italy. 1 +4.6% at constant scope and exchange rates 2 Including 100% of Private Banking in the domestic networks (excluding PEL/CEL effects) 3 +4.7% at constant scope and exchange rates 4 Restructuring costs related in particular to the integration of Raiffeisen Bank Polska and the discontinuation or restructuring of certain businesses (in particular BNP Paribas Switzerland) 5 Adaptation measures related in particular to BNL bc, Asset Management and BancWest 6 +1.5% at constant scope and exchange rates
3 RESULTS AS AT 31 DECEMBER 2019
The Group’s operating income, at 10,057 million euros, was thus up 9.7%. It was up 9.4% for the operating divisions. Non operating items totalled 1,337 million euros, up from 2018 (1,039 million euros). They reflected the exceptional impact of the capital gain from the sale of 16.8% of SBI Life in India, followed by the deconsolidation of the residual stake1 (+1,450 million euros), the +101 million euro capital gain from the sale of a building, and the impairment of goodwill (-818 million euros). They included in 2018 the +101 million euro capital gain from the sale of a building and the 286 million euros capital gain from the sale of 30.3% from First Hawaiian Bank. Pre-tax income, at 11,394 million euros (10,208 million euros in 2018), was up 11.6%. The average corporate tax rate was 24.2%, due in particular to the low taxation of the capital gains with respect to SBI Life. The Group’s net income attributable to equity holders thus came at 8,173 million euros, up 8.6% compared to 2018 and +4.7% excluding exceptional items. The return on tangible equity not revaluated clocked in at 9.8% reflecting the Group’s good overall performance. As at 31 December 2019, the common equity Tier 1 ratio came in at 12.1%, up 40 basis points compared to 1st January 20192. The leverage ratio3 came in at 4.6%. The Group’s immediately available liquidity reserve amounted to 309 billion euros, equivalent to over one year of room to manoeuvre in terms of wholesale resources. The net book value per share reached 79.0 euros, an average annual growth rate of 5.1% since 31 December 2008. Tangible net book value per share4 amounted to 69.7 euros, a growth rate of 7.3% since 31 December 2008 illustrating the continuous value creation throughout the cycle. The Board of Directors will propose to the shareholders at the Annual General Meeting to pay a dividend of 3.10 euros per share (+2.6% compared to 2018) paid in cash5, equivalent to a 50% pay-out ratio in line with the plan. The Group is continuing its transformation and is actively delivering its 2020 plan while strengthening its internal control and compliance system. At the end of 2019, BNP Paribas reaffirmed its ambition to be a global leader in sustainable finance. The Group is already recognized in this area, as illustrated for example, by being the number 3 participant worldwide in the green bond market at the end of 2019, with 9.8 billion euros as joint bookrunner for its clients, and having signed 3.7 billion euros of Sustainability Linked Loans at the end of 2019, a financing tool indexed on environmental, social and governance (ESG) criteria. This policy of engagement to have a positive impact on society is recognised through the bank’s strong rankings (World’s Best Bank for corporate responsibility in 2019 by Euromoney) and its presence in the major specialised indices (Dow Jones Sustainability Indices, World and Europe).
1 5.2% residual stake in SBI Life 2 Reminder: -10 bps compared to 31 December 2018 due to the impact of the new IFRS 16 accounting standard 3 Calculated according to the delegated act of the European Commission dated 10 October 2014 4 Revaluated 5 Subject to the approval of the Annual General Meeting on 19 May 2020, shares will go ex-dividend on 25 May 2020, payment on 27 May 2020
4 RESULTS AS AT 31 DECEMBER 2019
*
* * In the fourth quarter 2019, the group achieved a very good performance. At 11,333 million euros, revenues were up 11.5% compared to the fourth quarter 2018. In the operating divisions, revenues rose by 12.0%. At Domestic Markets1, it was up 3.4% where increased business (in particular in the specialised businesses) offset the effect of the low interest rate environment, at International Financial Services it increased strongly by 9.8% (+8.3% at constant scope and exchange rates) and at CIB sharply (+30.3%) with growth in all the businesses compared to a very unfavourable market context in the fourth quarter of 2018. Revenues were down in the Corporate Centre due to a lesser contribution from Principal Investment this quarter. At 8,032 million euros, the Group’s operating expenses were up 4.6% year-on-year and generated a positive jaws effect of 6.9 points. Operating expenses included the exceptional impact of transformation costs, restructuring costs2 and adaptation measures3 (departure plans) for 420 million euros (481 million euros in the fourth quarter 2018).The cost income ratio improved by 4.7 points. The operating expenses of the operating divisions were up 6.1% compared to the fourth quarter 2018: they were up 1.2% at Domestic Markets4, quasi stable in the networks (+0.1%) and up in the specialised businesses due to business development, up 3.4% for International Financial Services due to businesses’ growth and scope and foreign exchange effects (+1.6% at constant scope and exchange rates), and up 16.2% at CIB linked to business growth. The jaws effect was positive in the three operating divisions. The recurring cost savings generated by the 2020 plan in the fourth quarter 2019 came in at 159 million euros for a total of 1.8 billion euros since the launch of the programme in early 2017. The Group’s gross operating income thus came in at 3,301 million euros, up 33.0%. It increased by 25.5% for the operating divisions. The cost of risk, at 966 million euros, rose by 70 million euros compared to the fourth quarter 2018 due in particular to the rise in outstanding loans and provision write-backs at CIB and Personal Finance during the same period last year. It came in at 46 basis points of outstanding customer loans. The Group’s operating income, at 2,335 million euros (1,586 million euros in the fourth quarter 2018), was up 47.2%. It was up 31.1% for the operating divisions. Non operating items totalled 194 million euros (97 million euros in the fourth quarter 2018). They included the +101 million euros capital gain from the sale of a building. Pre-tax income, at 2,529 million euros (1,683 million euros in the fourth quarter 2018), was thus up 50.3% and the Group’s net income attributable to equity holders came in at 1,849 million euros, up sharply by 28.2% (+17.3% excluding exceptional items) compared to the fourth quarter of 2018 affected by the impact of unfavourable market conditions.
1 Including 100% of Private Banking in the domestic networks (excluding PEL/CEL effects) 2 Restructuring costs related in particular to the integration of Raiffeisen Bank Polska and the discontinuation or restructuring of certain businesses (in particular BNP Paribas Switzerland) 3 Adaptation measures related in particular to BNL bc, Asset Management and BancWest 4 Including 100% of Private Banking in the domestic networks (excluding PEL/CEL effects)
5 RESULTS AS AT 31 DECEMBER 2019
RETAIL BANKING & SERVICES DOMESTIC MARKETS For the whole of 2019, Domestic Markets’ business activity was up. Outstanding loans rose by 4.1% with good growth in loans in retail banking particularly in France and Belgium and in the specialised businesses (Arval, Leasing Solutions). Deposits rose by 7.2% compared to 2018. Private banking reported a good level of net asset inflows of +5.6 billion euros. The division confirmed the success of its digital offerings and its leading position among neobanks in Europe. It has 9.7 million digital customers and is recognised, for example in France, for its leadership in terms of functionalities (D-Rating agency ranked BNP Paribas number 1 among banking networks in France). The mobile usages of individual customers accelerated, with more than 97 million connections to apps, an increase of 23.4% compared to 2018 and with 56.5% of active clients being active digital customers. As at 31 December 2019, the digital bank Hello Bank! was gaining momentum in France, Belgium and Italy on the youth client segment, reaching 506,000 customers in Belgium, 520,000 customers in France and over 1.5 million customers in Germany. For its part, the Nickel neobank exceeded 1.5 million accounts opened as at 31 December 2019 (+33% compared to 31 December 2018). With 5,550 points of sale in France, Nickel has become the third largest distribution network in France, confirming its leadership in the neobank market in France and ranked in the top 5 in Europe. The Domestic Markets division confirms the strength of its growth-generating corporate and private banking franchises within the integrated model. A comprehensive and broad approach to customer needs with all the Group’s businesses combined with strong businesses such as Trade Finance (No.1 in France and Belgium) and Cash Management (No.1 in France and Belgium, No.3 in Italy) has forged a leading position in a dynamic corporate market. The division also reports strong positions in private banking (No. 1 in France and Belgium, No. 5 in Italy) with 8.1% growth in assets under management compared to 2018 and a positive cooperation drive with the Corporate business line (at the source of gross asset inflows close to 3 billion euros as at 31 December 2019). Finally, the Domestic Markets division continues its digital transformation and strengthens its model. It rolled out expanded customer knowledge tools in all countries leveraging shared digital assets. It continues to enhance operating efficiency and customer satisfaction with end-to-end digitalisation of the main customer journeys (onboarding, mortgages and investment products) in France, Italy and Belgium and to automate processes (over 700,000 transactions a month processed by robots in the networks in the fourth quarter 2019). Moreover, the operating division supports its customers beyond banking service with, for example, the development of Lyf Pay, a universal mobile payment solution that has already recorded 2.7 million downloads since it was launched in May 2017 and the roll-out of Telepass, a mobility offering for corporates and individuals in Italy (7,600 corporate customers and 66,800 individual users as at 31 December 2019). Revenues1, at 15,814 million euros, were up 0.8% compared to 2018. Growth in loan volumes and the strong increase in the specialised businesses were almost entirely offset by the low interest rate environment in the networks. Operating expenses1 (10,741 million euros) rose just 0.3% compared to 2018. They were down in the networks (-0.5%2) but up in the specialised businesses as regards to business growth (with a positive jaws effect). The jaws effect for the operating division was positive (+0.5 point).
1 Including 100% of Private Banking in France (excluding PEL/CEL effects), Italy, Belgium and Luxembourg 2 FRB, BNL bc and BRB
6 RESULTS AS AT 31 DECEMBER 2019
Gross operating income1 was up 1.9%, at 5,073 million euros, compared to 2018. The cost of risk was low, at 1,021 million euros (-26 million euros compared to 2018). It continued its decrease at BNL bc. Thus, after allocating one-third of Domestic Markets Private Banking’s net income to the Wealth Management business (International Financial Services division), the division reported 3,798 million euros in pre-tax income2, up 3.7% compared to 2018. In the fourth quarter 2019, revenues1, at 4,036 million euros, were up 3.4% compared to the fourth quarter 2018 as a result of increased business and good growth in the specialised businesses offset by the low interest rate environment. Operating expenses1 (2,635 million euros) were up 1.2% compared to the fourth quarter 2018, stable in the networks but up in the specialised businesses due to business development. The jaws effect was positive and the cost income ratio improved by 1.4 point. Gross operating income1, at 1,402 million euros, was up 7.8% compared to the fourth quarter 2018. The cost of risk was still low. It improved by 67 million euros compared to 2018 and continuing its decrease at BNL bc. After allocating one-third of Private Banking’s net income to the Wealth Management business (International Financial Services division), the division’s pre-tax income3 came in at 1,093 million euros, up sharply compared to the fourth quarter 2018 (+19.3%). French Retail Banking (FRB) For the whole of 2019, FRB continued its good business drive in the context of economic growth in France. Outstanding loans rose by 5.4% compared to 2018 with an increase particularly in corporate loans. Deposits were up 9.8% and private banking’s assets under management rose by 9.3%4 compared to 31 December 2018, with a strong rise in responsible savings (4.0 billion euros in outstandings, +48% compared to 31 December 2018) as a result of the launch of the financial advisory tool, myImpact5. The business leveraged the very good development of the corporate franchise, with in particular an increase in the number of onboardings of new clients (+27% compared to 2018) and good growth in cash management fees (+6.5% compared to 2018). Moreover, 65% of 123 companies selected as part of the French Tech initiative (French Tech 120) are FRB customers. Revenues6 totalled 6,328 million euros, up 0.3% compared to 2018. Net interest income6 was up 1.2% due to higher volumes partially offset by the effect of low interest rates. Fees6 were down 1.0% due to the decrease in charges on fragile customers at the beginning of 2019. Operating expenses6, at 4,602 million euros, were down 0.2% compared to 2018, with the impact of cost saving measures, the optimisation and streamlining of the network. The jaws effect was positive at 0.4 point. Gross operating income6 thus came in at 1,726 million euros, up 1.5% compared to 2018.
1 Including 100% of Private Banking in France (excluding PEL/CEL effects), Italy, Belgium and Luxembourg 2 Excluding PEL/CEL effects of +12 million euros compared to +20 million euros in 2018 3 Excluding PEL/CEL effects of -9 million euros compared to +15 million euros in the fourth quarter of 2018 4 Excluding the internal transfer of a subsidiary 5 Financial advisory solution for responsible investments in France 6 Including 100% of Private Banking in France (excluding PEL/CEL effects)
7 RESULTS AS AT 31 DECEMBER 2019
At 17 basis points of outstanding customer loans, the cost of risk1 was at a low level. It came in at 329 million euros, up 41 million euros compared to 2018. Thus, after allocating one-third of French Private Banking’s net income to the Wealth Management business (International Financial Services division), FRB posted 1,261 million euros in pre-tax income2, down just 0.2% compared to 2018. In the fourth quarter 2019, revenues1 totalled 1,569 million euros, up 1.0% compared to the fourth quarter 2018. Net interest income1 was up 0.2%, as a result of higher volumes partially offset by the effect of low interest rates. Fees1 were up 2.1%, the increase in financial fees and commissions on payment instruments being mitigated by the decrease in fees on fragile customers. Operating expenses1, at 1,152 million euros, were up 0.3% compared to the fourth quarter 2018. The impact of the cost reduction measures generated a positive 0.7 point jaws effect. Gross operating income1 thus came in at 417 million euros, up 3.1% compared to the same period last year. At 21 basis points of outstanding customer loans, the cost of risk1 was at a low level. It came in at 98 million euros, up 13 million euros compared to the fourth quarter 2018 when it was at a particularly low level. Thus, after allocating one-third of French Private Banking’s net income to the Wealth Management business (International Financial Services division), FRB posted 292 million euros in pre-tax income3, down 2.7% year-on-year. BNL banca commerciale (BNL bc) For the whole of 2019, BNL bc’s business operated in a lacklustre economic environment. Outstanding loans were down 1.9%4; the business continued to grow its market share on the corporate client segment: +0.4 point in 3 years to 5.7%5. Deposits were up 4.8% compared to 2018. The rise (+8.0% compared to 31 December 2018) in off balance sheet savings outstandings continued, driven by life insurance (+9.9% compared to 2018). BNL bc is developing new digital services with the launch of Apple Pay in the Hello bank! mobile apps, thereby finalising the roll-out of the agreement signed with Apple within the scope of Domestic Markets. Revenues6 were down 0.5% compared to 2018, at 2,778 million euros. Net interest income6 was down just 0.1% due to the persistently low interest rate environment and the positioning on clients with a better risk profile. Fees6 were down 1.1% compared to 2018 due to the unfavourable market context and non-recurring items at the beginning of the year. Operating expenses6, at 1,800 million euros, were up just 0.1% compared to 2018, reflecting the effect of cost reduction and adaptation measures. Gross operating income6 thus came in at 978 million euros, down 1.7% year-on-year. The cost of risk6, at 490 million euros (-102 million euros compared to 2018), continued its improvement. It stood at 64 basis points of outstanding customer loans.
1 Including 100% of Private Banking in France (excluding PEL/CEL effects) 2 Excluding PEL/CEL effects of +12 million euros compared to +20 million euros in 2018 3 Excluding PEL/CEL effects of -9 million euros compared to +15 million euros in the fourth quarter of 2018 4 -0.1% excluding the impact of the sale of non-performing loans 5 Source: Italian Banking Association 6 Including 100% of Italian Private Banking
8 RESULTS AS AT 31 DECEMBER 2019
Thus, after allocating one-third of Italian Private Banking’s net income to the Wealth Management business (International Financial Services division), BNL bc posted pre-tax income of 443 million euros, up sharply (+24.3%) compared to 2018. In the fourth quarter 2019, revenues1 were up 4.6% compared to the fourth quarter 2018, at 755 million euros. Net interest income1 was up 8.1% compared to the fourth quarter 2018, benefitting from a slight improvement in margins on the new loan origination and the impact of a positive non-recurring item partially offset by the impact of the low interest rate environment and the positioning on clients with a better risk profile. Fees1 were down 0.7%. Operating expenses1, at 450 million euros, were up 2.2%, as a result of higher contributions to the deposit guarantee scheme in Italy. Yet, the increase is contained thanks particularly to the effect of cost reduction measures. Gross operating income thus came in at 305 million euros, up 8.3% compared to the same period last year. The cost of risk1, at 109 million euros, continued its improvement (-55 million euros compared to the fourth quarter 2018). It came in at 57 basis points of outstanding customer loans. Thus, after allocating one-third of Italian Private Banking’s net income to the Wealth Management business (International Financial Services division), BNL bc posted 181 million euros in pre-tax income, up 72.6% year-on-year. Belgian Retail Banking For the whole of 2019, BRB reported sustained business activity. Loans were up 4.4% compared to 2018 with good growth in loans to corporates and an increase in loans to individuals. Deposits rose by 5.1% and off balance sheet savings grew 8.2% compared to 2018, with in particular a strong rise in mutual fund outstandings (+12.8% compared to 2018) and an increase in life insurance outstandings. The business continued to evolve its operational model, with in particular the conclusion of an agreement between the Belgian main banks to set up an integrated network of ATMs that provides better coverage around the country in order to be ever closer to customers. BRB’s revenues2 were down 2.0% compared to 2018, at 3,524 million euros. Net interest income2 was down 3.1%, as the impact of the low interest rate environment was only partially offset by higher loan volumes. Fees2 were up 1.4% compared to 2018. Operating expenses2, at 2,480 million euros, were down (-1.6%) compared to 2018 thanks to the effect of cost reduction measures. The business closed 88 branches in 2019. Gross operating income2 thus came in at 1,044 million euros, down 2.8% compared to 2018. The cost of risk2 totalled 55 million euros compared to 43 million euros in 2018. At 5 basis points of outstanding customer loans, it was very low. After allocating one-third of Belgian Private Banking’s net income to the Wealth Management business (International Financial Services division), BRB thus posted pre-tax income of 929 million euros, down 5.1% compared to 2018.
1 Including 100% of Italian Private Banking 2 Including 100% of Belgian Private Banking
9 RESULTS AS AT 31 DECEMBER 2019
In the fourth quarter 2019, BRB’s revenues1 were up 2.5% compared to the fourth quarter 2018, at 878 million euros. Net interest income1 was down 0.3% due to low interest rates and fees1 rose by 11%, particularly thanks to growth in off balance sheet savings outstandings and fees generated in private banking. Operating expenses1, at 560 million euros, were down 1.9% compared to the fourth quarter 2018 thanks to the effects of the transformation plan. The jaws effect was positive at 4.3 points in the fourth quarter 2019. Gross operating income1, at 318 million euros, was thus up 11.1% compared to the same period last year. The cost of risk1 varied by +39 million euros compared to the same period a year earlier when provisions were offset by write-backs. At 2 basis points of outstanding customer loans, it remained very low. After allocating one-third of Belgian Private Banking’s net income to the Wealth Management business (International Financial Services division), BRB thus generated 302 million euros in pre-tax income, up 26.9% compared to the fourth quarter 2018. Other Domestic Markets business units (Arval, Leasing Solutions, Personal Investors, Nickel and Luxembourg Retail Banking) For the whole of 2019, all the specialised businesses of Domestic Markets showed a very good drive. Arval’s leading position was confirmed on its perimeter of 27 countries and strengthened by the doubling of the number of white label partnerships with car manufacturers. Arval’s financed fleet grew strongly by 8.9%2 across all segments. Leasing Solutions’ financing outstandings rose by 6.9%2 compared to 2018. Personal Investors reported an increase in assets under management (+21.8% compared to 31 December 2018) and Nickel continued its very strong growth with more than 366,000 accounts opened this year (1.5 million accounts opened as at 31 December 2019). Luxembourg Retail Banking (LRB)’s outstanding loans rose by 8.6% compared to 2018, with good growth in mortgages and corporate loans. Deposits were up 11.5%. The revenues3 of the five businesses, at 3,184 million euros, were up 6.6% compared to 2018 in aggregate. Operating expenses3 rose by 4.5% compared to 2018, at 1,859 million euros; up with the effect of business development contained by cost saving measures and operating efficiency gains. The jaws effect was positive by 2.1 points. The cost of risk3 totalled 146 million euros (123 million euros in 2018). Thus, the pre-tax income of these five businesses, after allocating one-third of Luxembourg Private Banking’s net income to the Wealth Management business (International Financial Services division), rose significantly by 9.5% compared to 2018, at 1,165 million euros, reflecting the good drive of the businesses.
1 Including 100% of Belgian Private Banking 2 At constant scope and exchange rates 3 Including 100% of Private Banking Private Banking in Luxembourg
10 RESULTS AS AT 31 DECEMBER 2019
In the fourth quarter 2019, revenues1 of the five businesses, at 834 million euros, were up 8.2% compared to the fourth quarter 2018 due to good business development, with particularly strong revenue growth at Arval and Leasing Solutions. Operating expenses1 rose by 6.6% compared to the fourth quarter 2018, to 473 million euros, in line with business growth, generating a positive 1.6 point jaws effect. The cost of risk1 was up 13 million euros compared to 42 million euros in the fourth quarter 2018. Thus, the pre-tax income of these five business units, after allocating one-third of Luxembourg Private Banking’s net income to the Wealth Management business (International Financial Services division), rose sharply to 318 million euros (+9.9% compared to the fourth quarter 2018).
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INTERNATIONAL FINANCIAL SERVICES For the whole of 2019, International Financial Services continued its strong growth and deployed sustained business activity: outstanding loans were up 8.1% compared to 2018 (+5.1% at constant scope and exchange rates) with good growth at Personal Finance and Europe-Mediterranean. The division reported +20.2 billion euros in net asset inflows, with particularly good asset inflows at Wealth Management as well as in Insurance notably in unit-linked policies. Assets under management of the savings and insurance businesses totalled 1,123 billion euros (+9.3% compared to 31 December 2018). The IFS division strengthens the leading positions of its businesses, at the core of the integrated model (Personal Finance: the number 1 consumer credit specialist in Europe in 33 countries; the Europe-Mediterranean and BancWest networks with more than 15 million customers; BNP Paribas Cardif: global leader in creditor protection insurance, present in 34 countries; the number 1 private bank in the eurozone; and BNP Paribas Asset Management: a global asset manager, leader in sustainable finance). It is developing new growth-generating partnerships at Personal Finance (Opel in Poland, Volvo in Italy, BYmyCAR in France, Ford in several European countries, Carrefour in Italy, Leroy Merlin in Brazil) and in Insurance (strategic alliance with ScotiaBank, and with Sainsbury’s Bank and Argos). The IFS division optimises customer service through digitalisation. In its international retail networks, it already has 3.9 million euros digital customers. It is successfully developing new digital solutions to support its clients: 85% of the transactions at Personal Finance are performed in self-care, the digitalised creditor protection insurance journey is a success in France for Cardif (90% of immediate responses for personal insurance and 80% of immediate responses for collective insurance), 48% of clients actively use digital channels at Wealth Management2. The division is incorporating open innovation and new technologies in co-creation with start-ups, relying in particular on Station F, one of the largest start-up accelerators worldwide. BNP Paribas Plug and Play, accelerated 47 projects at Station F with 36 start-ups and an industrialisation rate of 35% among the best in the Fintech ecosystem. It also has doubled the capacity of Bivwak, a European set up for project acceleration created by BNP Paribas in 2017 based on agile development of innovative solutions for our clients and skill improvement of our employees. Finally, it is constantly developing robotics (more than 760,000 transactions a month processed by robots). 150 projects using artificial intelligence are already operational or in development.
1 Including 100% of Private Banking in Luxembourg 2 Wealth Management clients with at least one connection per month
11 RESULTS AS AT 31 DECEMBER 2019
The division’s revenues, at 17,183 million euros, were up 6.9% compared to 2018. At constant scope and exchange rates, they rose by 4.7% in connection with the good drive at Personal Finance and the very good performance of insurance and the Europe-Mediterranean banking networks. Operating expenses, at 10,507 million euros, were up 4.5%. At constant scope and exchange rates, they rose by only 1.5%, the rise being contained by the contribution of cost saving measures and operating efficiency gains. The jaws effect was positive at 2.4 points. Gross operating income thus came in at 6,676 million euros, up 10.9% compared to 2018 (+10.4% at constant scope and exchange rates). The cost of risk, at 1,911 million euros, was up 344 million euros compared to 2018. It increased by 309 million euros at constant scope and exchange rates. International Financial Services’ pre-tax income thus came in at 5,226 million euros, up 4.5% compared to 2018 (+6.7% at constant scope and exchange rates). In the fourth quarter 2019, revenues, at 4,391 million euros, were up 9.8% with a slightly favourable foreign exchange effect (appreciation of the dollar offset by the depreciation of the Turkish lira). At constant scope and exchange rates, they rose by 8.3% compared to 2018, an increase driven particularly by the very good performance of Insurance, Real Estate Services, Personal Finance and the Europe-Mediterranean banking networks. Operating expenses, at 2,715 million euros, were up 3.4% (+1.6% at constant scope and exchange rates), resulting in a positive jaws effect of 6.7 points. Gross operating income thus came in at 1,675 million euros, up 22.0% compared to the fourth quarter 2018 (+21.1% at constant scope and exchange rates). The cost of risk, at 574 million euros, was up 173 million euros compared to a low level in 2018, in particular for Personal Finance and Europe-Mediterranean. International Financial Services’ pre-tax income thus came in at 1,201 million euros, up 9.1% compared to the fourth quarter 2018 (+9.7% at constant scope and exchange rates), reflecting the division’s good drive. Personal Finance For the whole of 2019, Personal Finance continued to grow: outstanding loans grew by 9.2%, driven by a business drive in Europe and in connection with partnerships. This increase in volumes was accompanied by a good control of margins at production. In 2019, the business executed four securitisation transactions1 in Europe for a total amount of 3.8 billion euros. It signed a pan-European agreement (Netherlands, Belgium, Luxembourg, Poland) with Ford Europe for a 5-year period and a partnership with Arval in the United Kingdom for a car inventory financing solution for car dealers. Its partnership with Opel in new countries (Poland, Netherlands and Spain) got off to a good start in 2019. Personal Finance’s revenues, at 5,796 million euros, were up 4.8% compared to 2018 in connection with the rise in volumes and growth sustained in particular by the very good drive in Italy, Spain and Germany. Operating expenses, at 2,857 million euros, were up 3.3% compared to 2018 due to the support of increased business and thanks to cost saving measures. The jaws effect was positive at 1.4 point and the cost income ratio improved by 0.7 point compared to 2018.
1 Non-deconsolidating
12 RESULTS AS AT 31 DECEMBER 2019
Gross operating income thus came in at 2,939 million euros, up 6.2% compared to 2018. The cost of risk came in at 1,354 million euros, up 169 million euros compared to 2018 in connection with the rise of outstandings. At 145 basis points of outstanding customer loans, it was still low. Personal Finance’s pre-tax income thus came in at 1,602 million euros, down 2.7% compared to 2018. It was down 0.6% excluding a non-recurring item in an associated company. In the fourth quarter 2019, Personal Finance’s revenues, at 1,485 million euros, were up 5.3% compared to the fourth quarter 2018 in connection with the rise in volumes and the positioning on products with a better risk profile. Operating expenses, at 721 million euros, were down 1.0% compared to the fourth quarter 2018, as a result of the gradual effect of cost saving measures. The jaws effect was largely positive (+6.3 points). Gross operating income thus came in at 764 million euros, up 12.0% compared to the fourth quarter 2018. The cost of risk reached 156 basis points of outstanding customer loans, or 370 million euros, up 71 million euros compared to a particularly low level in the fourth quarter 2018. Personal Finance’s pre-tax income thus came in at 374 million euros, down 6.4% compared to the fourth quarter 2018. Europe-Mediterranean For the whole of 2019, Europe-Mediterranean reported a good overall performance with business drives sustained by the universal banking model and the strengthening of franchises. Europe-Mediterranean’s outstanding loans were up 1.4%1 compared to 2018, with particularly good growth in Poland and Morocco. For their part, deposits were up 1.2%1. The business successfully completed the operational integration of Raiffeisen Bank Polska and generated the cost synergies expected. At 2,699 million euros, Europe-Mediterranean’s2 revenues rose by 6.8%1 compared to 2018, with growth in all regions, higher volumes and margins, and a good level of fees. Operating expenses2, at 1,799 million euros, rose by 1.0%1 compared to 2018, reflecting the implementation of cost synergies in Poland in connection with the integration of Raiffeisen Bank Polska3 (39 million euros realised in 2019, closure of 188 branches) and the effects of the transformation plan in all regions. The evolution of the operating expenses generated a largely positive jaws effect of 5.9 points. The cost of risk2 totalled 399 million euros (+17.9%1 compared to 2018 due to the rise in Turkey). At 98 basis points of outstanding customer loans, it remained at a moderate level. After allocating one-third of Turkish Private Banking’s net income to the Wealth Management business, Europe-Mediterranean thus generated 728 million euros in pre-tax income, strongly up 23.1% at constant scope and exchange rates, given the high level of non-operating items in 2018 and up 6.5% at historical scope and exchange rates, due in particular to the strong depreciation of the Turkish lira between 2018 and 2019.
1 At constant scope and exchange rates 2 Including 100% of Private Banking in Turkey 3 Acquisition on 31 October 2018 of the core banking activities of Raiffeisen Bank Polska (excluding mortgage loans in foreign currencies and a limited number of other assets)
13 RESULTS AS AT 31 DECEMBER 2019
In the fourth quarter 2019, Europe-Mediterranean’s revenues1, at 702 million euros, rose by 10.3%2 compared to the fourth quarter 2018 with good growth in all regions, and in particular in Turkey and Poland. Operating expenses1, at 459 million euros, were up 5.2%2, with an increase in costs related to business development, contained thanks to savings measures. The jaws effect was largely positive (+5.1 points). The cost of risk1 was up 36 million euros compared to a low level in 2018, with a moderate increase in Turkey. After allocating one-third of Turkish Private Banking’s net income to the Wealth Management business, Europe-Mediterranean generated 197 million euros in pre-tax income, up 10.9% at constant scope and exchange rates and by 11.9% at historical scope and exchange rates. BancWest For the whole of 2019, BancWest maintained its business drive but operated in a less favourable interest rate environment. Loans grew by 1.2%2 compared to 2018, with growth in loans to individuals and corporate customers. Deposits were up +3.9%2 with good growth in customer deposits (+5.4%)3. Private Banking’s assets under management (15.7 billion dollars as at 31 December 2019) were up 14.3% compared to 31 December 2018. Cooperation with CIB is expanding, with 57 deals made jointly in 2019. At 2,375 million euros, revenues4 were down 1.8%2 compared to 2018. The decrease in the interest rate margin in an environment of downward interest rates was only partially offset by an increase in business activity and fees (in particular cards and cash management). Operating expenses4 were down 3.6%2, to 1,712 million euros, due to the reduction in the headcount (-7.2% compared to 31 December 2018), related in particular to the mutualisation of some functions with CIB and the transfer of support functions to a lower cost area (Arizona). Gross operating income4, at 633 million euros, was up 3.0%2 compared to 2018. The cost of risk rose by 78 million euros compared to a low base in 2018. At 27 basis points of outstanding customer loans, it remained low. Thus, after allocating one-third of U.S. Private Banking’s net income to the Wealth Management business, BancWest posted 484 million euros in pre-tax income, down 10.0% compared to 2018 at constant scope and exchange rates but down only 5.5% at historical scope and exchange rates given a positive foreign exchange effect. In the fourth quarter 2019, revenues4, at 611 million euros, were down 1.7%2 compared to the fourth quarter 2018 with a decrease in net interest margin attenuated by an increase in business and fees. At 406 million euros, operating expenses4 were down 9.0%2 compared to the fourth quarter 2018. Gross operating income4, at 205 million euros, was thus up 17.0%2 year-on-year. The cost of risk4 (84 million euros) increased this quarter due to two specific files, and rose by 62 million euros compared to the fourth quarter 2018. Thus, after allocating one-third of U.S. Private Banking’s net income to the Wealth Management business, BancWest posted 110 million euros in pre-tax income, down 21.7% at constant scope and exchange rates compared to the fourth quarter 2018 (-20.8% at historical scope and exchange rates). 1 Including 100% of Private Banking in Turkey 2 At constant scope and exchange rates 3 Deposits excluding treasury activities 4 Including 100% of Private Banking in the United States
14 RESULTS AS AT 31 DECEMBER 2019
Insurance and Wealth and Asset Management For the whole of 2019, the Insurance and Wealth and Asset Management businesses continued their growth. Assets under management1 reached 1,123 billion euros at 31 December 2019. They rose by 9.3% compared to 31 December 2018 due in particular to a very favourable performance effect: +79.7 billion euros on the back of the rebound of financial markets. Net asset inflows came in at +20.2 billion euros with good net asset inflows at Wealth Management in Asia, Germany and Belgium, slight asset outflows in Asset Management due to money market funds, good net asset inflows in Real Estate Investment Management in Germany and in France and, lastly, good asset inflows in insurance in particular in unit-linked policies. The foreign exchange effect was favourable (+3.3 billion euros) and a scope effect unfavourable (-3.6 billion euros) in connection with the deconsolidation of SBI Life. As at 31 December 2019, assets under management1 broke down as follows: Asset Management (470 billion euros, including 30 billion euros from Real Estate Investment Management), Wealth Management (393 billion euros), and Insurance (260 billion euros). Insurance continued the development of its business, diversifying its asset inflows in savings with an increasing share of unit-linked policies in particular in France and Asia, by developing volumes of protection insurance in Europe and Latin America, and property and casualty insurance in the FRB network via Cardif IARD. The business continues to strengthen its partnerships through the signing of strategic alliances with Scotiabank in four countries in Latin America, with Famsa, a leading retailer in Mexico, and with Sainsbury’s Bank and Argos to develop pet insurance in the United Kingdom. Insurance’s revenues, at 3,068 million euros, rose by 14.5% compared to 2018 driven by a favourable effect of rising markets and good business drive. Operating expenses, at 1,500 million euros, rose by 6.7% as a result of business development. Despite the scope effect related to the deconsolidation of SBI Life, pre-tax income was up 16.0% compared to 2018, at 1,716 million euros. In Wealth and Asset Management, the global expertise of Wealth Management continued to be recognised, being named Best Private Bank in the World (Global Finance) and Best Global European Private Bank (Private Banker International). The Asset Management business continued to evolve and amplified the adaptation of its organisation, the successful roll-out of the Aladdin global operational investment system and the development of new solutions (ESG, quantitative solutions, multi-assets, real assets, etc.). Wealth and Asset Management’s revenues (3,320 million euros) were up 1.0% compared to 2018 with a continuous improvement during the year after a difficult first quarter due to the financial market crisis at the end of 2018 and with a very good performance of Real Estate Services at the end of the year. Operating expenses totalled 2,682 million euros. They rose by 1.7% compared to 2018 thanks to the measures of the transformation plan, in particular in Asset Management (gradually decommissioning 50 applications after the successful roll-out of the Aladdin solution). At 695 million euros, Wealth and Asset Management’s pre-tax income, after receiving one-third of the net income of private banking’s net income in the domestic markets, in Turkey and in the United States, was thus up 2.0% compared to 2018. In the fourth quarter 2019, Insurance’s revenues, at 654 million euros, rose by 20.7% compared to the fourth quarter 2018 due to the base effect marked by the financial market crisis at the end of 2018 and the good business growth, in particular in Italy and Latin America. Operating expenses, at 380 million euros, were up 10.0% as a result of business development, generating a largely positive jaws effect. Despite the scope effect related to the deconsolidation of SBI Life, pre-tax income was up 26.3% compared to the fourth quarter 2018, at 304 million euros.
1 Including distributed assets
15 RESULTS AS AT 31 DECEMBER 2019
Wealth and Asset Management’s revenues (957 million euros) were up 10.5% compared to the fourth quarter 2018 due to the very good performance of Real Estate Services in Germany and France and the positive impact of the strong rebound in the financial markets for Wealth Management and Asset Management. Operating expenses totalled 760 million euros, up 4.3% compared to the fourth quarter 2018 due in particular to the very good development of Real Estate Services this quarter being mitigated by the decrease in costs in Asset Management (gradual effect of the transformation plan measures). At 216 million euros, Wealth and Asset Management’s pre-tax income, after receiving one-third of the net income of private banking’s net income in the domestic markets, in Turkey and in the United States, was thus sharply up 48.1% compared to the fourth quarter 2018.
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CORPORATE AND INSTITUTIONAL BANKING (CIB) For the whole of 2019, CIB strengthens its leading positions on targeted corporate and institutional client bases and gained market shares. CIB ranked No. 3 among the CIBs in EMEA (Europe, Middle East and Africa) based on revenues generated in the first nine months of 2019, thus making it the leading European player behind two U.S. institutions. With the success of its development plans in selected European countries, the division confirms its leading positions on the Corporate segment, with over 260 new large corporate group clients since 2016, in particular in targeted countries (Germany, United Kingdom, Netherlands and Scandinavia) and almost 1,500 new client relationships with subsidiaries of multinational clients in 2019. It continued to develop its franchises in the Asia-Pacific and the Americas regions with reinforced cooperation with BancWest. Major initiatives were also launched in 2019 to intensify business development with institutional clients. The division is thus strengthening its position with fund managers via the firm agreement with Deutsche Bank signed on 13 November 2019 on the transfer of prime brokerage and electronic execution while ensuring service continuity to clients; the transition period started with the first transfers of teams. The division also continued the optimisation of certain activities, with the signing of an agreement to transfer fund distribution activities to Allfunds, one of the leading platforms in this sector worldwide (“Wealthtech”), in exchange for a strategic stake of 22.5%1. The division intensified cooperation with all the Group’s businesses and capitalised on the close relations enhanced by the integrated model with joint initiatives in transaction banking. It expanded its proposal of CIB solutions to major Domestic Markets and IFS clients with a global and joint approach to all the Group’s businesses. More than 2.8 billion euros in revenues per year were generated by Domestic Markets and IFS from the clients covered by CIB, over 500 million euros are generated by CIB from the clients covered by Domestic Markets and IFS. The digitalisation of customer services is increasing with more than 11,500 corporate clients on the Centric platform in 2019, more than 21 million euros electronic orders processed in 2018 for Global Market clients and over 6,000 institutional clients on the Securities Services Neolink platform. The digitalisation and automation of processes as well as the ramping up of service platforms support the improvement of operating efficiency.
1 Subject to the approval of the regulatory authorities and the necessary authorisations
16 RESULTS AS AT 31 DECEMBER 2019
Thus, as announced in early 2019, CIB stepped up its transformation plan, generating 298 million euros in recurring savings in 2019. The division’s revenues, at 12,080 million euros, rose by 11.6% compared to 2018 with growth in the three businesses and very good performances by Global Markets and Corporate Banking. Global Markets’ revenues, at 5,571 million euros, were up 17.9% compared to 2018 and 20.7% excluding the effect of the creation of the new Capital Markets platform1. The business reported very sustained business growth based on market share gains in particular in FICC2. The VaR, which measures the level of market risks, was still at a very low level (26 million euros). FICC’s revenues2, at 3,563 million euros, were up 31.1% (+36.0% excluding the effect of the creation of the new Capital Markets platform1) compared to 2018, due to a sharp rise in primary markets and credit, a strong rebound in forex and emerging markets and a very good performance in rates. Equity and Prime Services’ revenues, at 2,007 million euros, were stable compared to 2018, with a gradual recovery in 2019 from a low point at the end of 2018 and a good performance on equity derivatives, in particular on structured products. Global Markets confirmed its strong positions on bond issues (number 1 in the EMEA region, number 1 for all bond issues in euro, and number 8 for all international issues) and on multi-dealer platforms (top 3 on euro credit derivatives and emerging market bonds in local currencies and top 5 on swaps and euro bonds). The expertise of the business was recognised: BNP Paribas was named Currency Derivatives House of the Year and Eurobond House of the Year (Risk Award 2019). Securities Services’ revenues, at 2,198 million euros, were up 0.9% compared to 2018 (+3.0% excluding non-recurring items) as a result of asset growth (+8.2% on average compared to 2018), transactions up (+2.3% on average) and strong growth in the Asia region (+18% compared to 2018). Assets under custody and administration were up sharply 12.2% compared to 31 December 2018 due in particular to the integration of Janus Henderson’s assets in the United States since the end of March. Furthermore, the expertise of the business was widely recognised as Transaction Bank of the Year for securities service activities according to The Banker magazine and Custodian of the Year according to AsiaRisk magazine. Corporate Banking’s revenues, at 4,312 million euros, rose by 9.9% compared to 2018 (+6.5% excluding the effect of the creation of the Capital Markets platform1). The strong development of the business was driven in particular by the very good business development in Europe in connection with the use of the Capital Markets platform by clients (+12.8% compared to 2018) ramping up, the strong rise in fees (+7.2% compared to 2018) and the 7.5%3 increase in outstanding loans to 146 billion euros. The business is the leading European player in Investment Banking in the Europe, Middle East & Africa region, number 1 in Europe for large companies in Corporate Banking, cash management and trade finance. CIB’s operating expenses, at 8,663 million euros, rose by 6.1% compared to 2018, a rise linked to the strong business growth, nevertheless contained by the effect of cost saving measures (development of mutualised platforms, optimisation of processes, etc.). The jaws effect was largely positive (+5.5 points). 1 Global Markets and Corporate Banking shared platform for corporate finance introduced in the first quarter 2019 (transfer of €136m of revenues from Global Markets to Corporate Banking in 2018) 2 Fixed Income, Currencies and Commodities 3 Average outstandings at constant scope and exchange rates
17 RESULTS AS AT 31 DECEMBER 2019
CIB’s gross operating income was thus up 28.2%, at 3,417 million euros. The cost of risk for CIB was still low, at 218 million euros. It rose by 175 million euros compared to 2018, which had benefited from many provision write-backs. CIB thus generated 3,207 million euros in pre-tax income, sharply up 19.6%, reflecting the solid growth in business combined with the success of its transformation. In the fourth quarter 2019, the operating division’s revenues, at 3,101 million euros, rose sharply by 30.3% compared to the fourth quarter 2018. Global Markets’ revenues, at 1,340 million euros, were doubled compared to a low base (650 million euros) in the fourth quarter 2018 due to a particularly challenging context. At 820 million euros, FICC1 revenues rose sharply 62.5% compared to the fourth quarter 2018 (+73.3% excluding the effect of the creation of the new Capital Markets platform2) with very strong growth in all segments (rates, foreign exchange, credit and primary market). Revenues of Equity and Prime Services, at 520 million euros, were up sharply compared to a low base in the fourth quarter 2018 (145 million euros). The business recorded very good derivatives client business, in particular on structured products. Securities Services’ revenues, at 551 million euros, were down 12.2% compared to the fourth quarter 2018; excluding the positive impact of the revaluation of a stake in the fourth quarter 2018, they were up 4.2% in line with the growth of business (increase in asset volumes and the number of transactions). Corporate Banking’s revenues, at 1,210 million euros, were up 9.8% compared to the fourth quarter 2018 (+4.8% excluding the effect of the introduction of the Capital Markets platform2) driven in particular by the increases in the Europe, Middle East & Africa and Asia-Pacific regions and good growth in transaction activities (cash management and trade finance). At 2,229 million euros, CIB’s operating expenses were up 16.2% year-on-year due to the strong increase in business. The jaws effect remained strongly positive (14.1 points) due to cost saving measures. CIB’s gross operating income was 871 million euros, up very sharply compared to the fourth quarter 2018 (460 million euros). CIB’s cost of risk was improving by 20 million euros and at a still low level: 80 million euros. CIB generated 801 million euros in pre-tax income, i.e. a doubling compared to the fourth quarter 2018 (393 million euros).
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1 Fixed Income, Currencies and Commodities 2 Transfer of €55m of revenues from Global Markets to Corporate Banking in 4Q19
18 RESULTS AS AT 31 DECEMBER 2019
CORPORATE CENTRE For the whole of 2019, Corporate Centre revenues amounted to 71 million euros compared to 479 million euros in 2018, which included First Hawaiian Bank’s contribution of 359 million euros1. Operating expenses totalled 1,728 million euros compared to 1,965 million euros in 2018. They included the exceptional impact of 744 million euros in transformation costs (1,106 million euros in 2018), 311 million euros in restructuring costs2 (129 million euros in 2018) and 162 million euros in additional businesses’ adaptation measures (departure plans)3 (0 in 2018). In 2018, they included 189 million euros in operating expenses of First Hawaiian Bank. The cost of risk was 58 million euros, down 51 million euros compared to 2018 when it included 13 million euros in the cost of risk of First Hawaiian Bank. Other non-operating items totalled 786 million euros compared to 353 million euros in 2018. They included the exceptional impact of the capital gain realised from the sale of 16.8% of SBI Life in India, followed by the deconsolidation of the residual stake (+1,450 million euros), the capital gain realised from the sale of a building for +101 million euros, and the impairments of goodwill (-818 million euros). They included in 2018 the exceptional impact of a +101 million euros capital gain realised from the sale of a building, and the 286 million euro capital gain realised from the sale of 30.3% from First Hawaiian Bank. The Corporate Centre’s pre-tax income thus came in at -848 million euros compared to -1 159 million euros in 2018. In the fourth quarter 2019, Corporate Centre’s revenues totalled -45 million euros compared to -1 million euros in the fourth quarter 2018 with a lower contribution from Principal Investment this quarter compared to the fourth quarter 2018. Operating expenses totalled 529 million euros compared to 605 million euros in the fourth quarter 2018. They included the exceptional impact of 175 million euros in transformation costs (385 million euros in the fourth quarter 2018), 163 million euros in restructuring costs2 (97 million euros in the fourth quarter 2018) and 81 million euros in businesses’ adaptation measures (early departure plans)3 (0 in the fourth quarter 2018). The cost of risk was 60 million euros (74 million euros in the fourth quarter 2018). Other non-operating items totalled 62 million euros (-88 million euros in the fourth quarter 2018). They recorded +101 million euros in capital gains from the sale of a building. The Corporate Centre’s pre-tax income thus came in at -558 million euros compared to -743 million euros in the fourth quarter 2018.
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1 Reminder: First Hawaiian Bank (FHB) no more fully consolidated from 1st August 2018 and its contribution to the income statement reallocated retroactively to the Corporate Centre effective from 1st January 2018 (see new quarterly series published on 29 March 2019) 2 Restructuring costs related in particular to the integration of Raiffeisen Bank Polska and the discontinuation or restructuring of certain businesses (in particular BNP Paribas Switzerland) 3 Related in particular to BNL bc, Asset Management and BancWest
19 RESULTS AS AT 31 DECEMBER 2019
FINANCIAL STRUCTURE The Group has a very solid balance sheet. The common equity Tier 1 ratio came in at 12.1% as at 31 December 2019, up 40 basis points from 1st January 2019 (down itself by 10 basis points compared to 31 December 2018 due to the impact of the new IFRS 16 accounting standard). The 40 basis point increase primarily broke down between: the 2019 net income excluding exceptional non-operating items and after taking into account a 50% pay-out ratio (+60 bps), the increase in risk-weighted assets at constant change net of the impact of securitisations (-40 bps), the net impact of the sales and acquisitions (SBI Life, the deconsolidation of the residual stake in this subsidiary and the impact of the agreement on Deutsche Bank’s Prime Brokerage) as well as the partial impairment of BancWest’s goodwill (+20 bps). The impact of other effects, including the change effect, on the ratio was on the whole limited. The leverage ratio1 stood at 4.6% as at 31 December 2019. The immediately available liquidity reserves totalled 309 billion euros, which is equivalent to more than one year of room to manoeuvre in terms of wholesale funding. The evolution of these ratios illustrates the Group’s ability to continuously adapt to regulatory changes and its exceptionally solid balance sheet.
*
* *
1 Calculated according to the delegated act of the European Commission dated 10 October 2014
20 RESULTS AS AT 31 DECEMBER 2019
2020 OBJECTIVES According to International Monetary Fund forecasts, economic growth is well-oriented for 2020 in the eurozone and in emerging markets, with a slight slowdown expected in the United States. The adjustment of monetary policies in the summer of 2019 led to a more unfavourable interest rate environment than anticipated at the beginning of 2019. Interest-bearing products of the network banks of the Eurozone are thus impacted. In this context, on the strength of its diversified revenue model, the Group anticipates to continue its growth. Strong business drive and growth: full contribution of the diversified and integrated model The contribution of the Group’s diversified model, the business drive, the strengthening of the franchises of the businesses, and also the increasing collaboration between the businesses and the full contribution of the transformation plan should fully support the Group’s capacity to generate growth in this environment. Domestic Markets anticipates a continuation in the acceleration of its business drive and the development of revenues, leveraging its leading positions in the specialised businesses and on corporate clients and private banking client segments with the strength of the integrated model. The division will continue to undertake the development of innovative digital offerings to acquire new customers and support evolving usages. Domestic Markets’ revenues in 2020 are nonetheless expected to decrease moderately due to the impact of the persistently low interest rate environment in the networks partially offset by a rise in business and strong growth in the specialised businesses. The operating division will pursue its efforts to reduce operating expenses in the networks while supporting growth in the specialised businesses, and should generate a neutral jaws effect. International Financial Services should continue the intensification of business growth based on its best in class offerings, its platforms, partnerships and distribution networks. It will pursue the selective growth of retail banking outside the eurozone and intensify the contribution of cooperation with the Group within the integrated model. IFS confirms its role as a growth engine for the Group with revenue expected to grow on the back of the business drive in all the IFS businesses and the development of partnerships. Supporting the increased business, the operating division should benefit from the full contribution of the levers of the transformation plan generating a positive jaws effect. CIB is expected to consolidate its leading position in Europe on corporates with the intensification of the country development plans and the success of Capital Markets. It will continue reinforcing the institutional franchise with the integration of Deutsche Bank’s Prime Brokerage platforms. Finally, CIB will capitalise on its global presence with targeted initiatives in Asia-Pacific (China, etc.) and the Americas (Brazil, Mexico, etc.) and will continue to develop cooperation with the other businesses of the Group. Buoyed by these initiatives, the division is anticipating continued revenue growth sustained by new market share gains. While supporting business growth, the effect of cost saving measures should enable the division to generate a positive jaws effect.
21 RESULTS AS AT 31 DECEMBER 2019
Transformation plan: a concrete transformation generating cost savings The exceptional transformation costs under the 2020 plan totalled 2.7 billion euros in three years. There will be no transformation costs in 2020, which will enable to reduce spending by 0.7 billion euros in 2020 compared to 2019. The recurring savings generated by the plan at the end of 2019 totalled 1.8 billion euros in line with the objectives. The Group expects to generate an additional 1.5 billion euros in additional recurring savings in 2020, thereby attaining the target of 3.3 billion euros in cumulative recurring cost savings. 2020 Exceptional items The ramp-up of remote work and flex office makes it possible to adjust the property portfolio. It is thus expected that the sales of buildings by the Group will generate, in 2020, c. 500 million euros in real estate capital gains. On another note, in 2020, the Group envisions exceptional costs up 200 million euros for the reinforcement of the information system as well as 100 million euros for restructuring measures and 100 million for adaptation measures – early departure plans. A policy of engagement in society with the ambition to be a leader in sustainable finance The Group has an ambitious Corporate Social Responsibility (CSR) policy and is committed to making a positive impact on society with concrete achievements. At the end of 2019, BNP Paribas reaffirmed its ambition to be a global leader in sustainable finance. The Group is taking strong positions, as a founding member of the United Nations Principles for Responsible Banking, which commits it to align its strategy with the Paris Agreement and the Sustainable Development Goals (SDGs). Its objective in 2020 is to provide 185 billion euros in financing to sectors contributing to the SDGs. It also promotes a more inclusive economy and business models for society. It is accompanying the acceleration of the energy and environmental transition by making the commitment to support the preservation of the ocean, which includes 1 billion euros to finance the ecological transition of ships by 2025, by taking the decision to reduce to nil its outstanding loans to companies related to thermal coal by 2030 in the European Union and 2040 in the rest of the world, and by raising its target of supporting renewable energy development by 18 billion euros by 2021. The Group stopped financing companies whose principal business activity is related to the unconventional oil & gas sector and stopped financing of new coal projects since 2017. The Group is also a very significant tax payer with a total amount of taxes and levies of 5.9 billion euros paid in 2019, including 2.5 billion euros in France.
22 RESULTS AS AT 31 DECEMBER 2019
Capital The Group’s capital generation is regular and solid. Between 2014 and 2019, average growth of the common equity Tier 1 ratio was 35 basis points a year on average despite the impacts of the change in accounting standards, in particular in 2018 and 2019. The target announced in 2017 to reach a 12% common equity Tier 1 ratio by the end of 2020 was already achieved in 2019. At 12.1% as at 31 December 2019, the Group’s common equity Tier 1 is thus well above the requests notified by the SREP. The finalisation of Basel 3 is in the process of being transposed in European Union law. After estimates of the European Banking Authority regarding the impact on capital requirements of banks, the European authorities reminded that this transposition is not expected to significantly increase these requirements for the banking industry taken as a whole. To this end, it is very probable that the exemptions decided during the vote of the CRD5 will be maintained. With this assumption and, to the extent necessary, by taking management actions, BNP Paribas deems that it will limit to 10% the inflation of its risk-weighted assets as a result of this transposition. This inflation is assumed to be at least partly offset by expected adjustments by the supervisor (European Central Bank (S.S.M.)) with respect to Pillar 2: the application of article 104a of CRD5 should authorise the partial coverage of P2R by hybrid securities (AT1 and T2) and no longer by common equity Tier 1. The requests of Pillar 2 themselves, based on the supervisory process and in particular stress tests, could be recalibrated. As a reminder, BNP Paribas is one of the banks whose CET1 ratio is the least affected by the stress tests. It therefore appears that with a CET1 ratio well above current requests as notified by the SREP and a regular and solid capital generation, BNP Paribas is favourably positioned to face the finalization of Basel 3. 2020 OBJECTIVES SUMMARY In 2020, the Group anticipates continuing to grow business in all the operating divisions, by leveraging a strong business drive and the contribution of the diversified and integrated model. The Group will be able to leverage an ever more efficient and more digital operating model serving customers and employees. The reinforcement of the franchises within the integrated model should continue, in particular for CIB with the ongoing development of its businesses and the strengthening of its European leadership. The Group forecasts to benefit from the 2020 transformation plan and cost saving measures that should enable a decrease in absolute value of the operating expenses and a positive jaws effect. The Group should continue to reinforce its leadership in sustainable finance and pursue an ambitious policy of engagement in civil society. On this basis, the return on tangible equity (ROTE) is expected to stand at 10% with a 50% dividend pay-out ratio in cash1.
* * *
1 Subject to shareholder approval at the Annual General Meeting
23 RESULTS AS AT 31 DECEMBER 2019
Commenting on these results, Jean-Laurent Bonnafé, Chief Executive Officer, stated: “With a net income of EUR 8.2 billion, BNP Paribas achieved a very good performance in 2019 thanks to its good business drive and the effects of its transformation. BNP Paribas confirms the strength of its diversified and integrated model. The way the Group operates has changed, being more efficient and digital for our clients and employees. The Group is actively executing its ambitious policy of engagement in society with the ambition of being a leader in sustainable finance. I would like to thank all the Group’s employees who have been mobilized for these good results.”
24 RESULTS AS AT 31 DECEMBER 2019
CONSOLIDATED PROFIT AND LOSS ACCOUNT
BNP Paribas’ financial disclosures for the fourth quarter 2019 and for the year 2019 are contained in this press release and in the presentation attached herewith. All legally required disclosures, including the Registration document, are available online at http://invest.bnpparibas.com in the “Results” section and are made public by BNP Paribas pursuant to the requirements under Article L.451-1-2 of the French Monetary and Financial Code and Articles 222-1 et seq. of the Autorité des Marchés Financiers’ general rules.
4Q19 4Q18 4Q19 / 3Q19 4Q19 / 2019 2018 2019 /
€m 4Q18 3Q19 2018
Group n.s. n.s. n.s.Revenues 11,333 10,160 +11.5% 10,896 +4.0% 44,597 42,516 +4.9%Operating Expenses and Dep. -8,032 -7,678 +4.6% -7,421 +8.2% -31,337 -30,583 +2.5%Gross Operating Income 3,301 2,482 +33.0% 3,475 -5.0% 13,260 11,933 +11.1%Cost of Risk -966 -896 +7.8% -847 +14.0% -3,203 -2,764 +15.9%Operating Income 2,335 1,586 +47.2% 2,628 -11.2% 10,057 9,169 +9.7%Share of Earnings of Equity -Method Entities 129 195 -33.9% 143 -9.9% 586 628 -6.7%Other Non Operating Items 65 -98 n.s. 34 +91.3% 751 411 +82.7%Non Operating Items 194 97 +99.9% 177 +9.5% 1,337 1,039 +28.7%Pre-Tax Income 2,529 1,683 +50.3% 2,805 -9.8% 11,394 10,208 +11.6%Corporate Income Tax -582 -144 n.s. -767 -24.1% -2,811 -2,203 +27.6%Net Income Attributable to Minority Interests -98 -97 +1.0% -100 -2.0% -410 -479 -14.4%Net Income Attributable to Equity Holders 1,849 1,442 +28.2% 1,938 -4.6% 8,173 7,526 +8.6%
Allocated Equity (€bn, year to date) 54.9 54.7 54.6 54.3 52.5 52.1 52.0 51.8
€m 4Q19 3Q19 2Q19 1Q19 4Q18 3Q18 2Q18 1Q18
DOMESTIC MARKETS (including 100% of PB in France, Italy, Belgium and Luxembourg)1 Excluding PEL/CEL Effects Revenues 4,036 3,892 3,925 3,961 3,903 3,874 3,938 3,969Operating Expenses and Dep. -2,635 -2,607 -2,516 -2,983 -2,603 -2,605 -2,528 -2,971Gross Operating Income 1,402 1,285 1,408 978 1,300 1,269 1,411 998Cost of Risk -254 -245 -214 -307 -322 -251 -204 -270Operating Income 1,147 1,040 1,194 671 978 1,018 1,206 727Share of Earnings of Equity-Method Entities 4 1 2 -6 0 5 -3 -6Other Non Operating Items 4 2 -6 1 -2 0 1 1Pre-Tax Income 1,156 1,043 1,190 666 975 1,024 1,205 723Income Attributable to Wealth and Asset Management -62 -67 -68 -58 -59 -67 -73 -65Pre-Tax Income of Domestic Markets 1,093 975 1,122 608 917 956 1,132 658
Allocated Equity (€bn, year to date) 25.7 25.7 25.7 25.5 25.2 25.0 24.7 24.4
€m 4Q19 3Q19 2Q19 1Q19 4Q18 3Q18 2Q18 1Q18DOMESTIC MARKETS (including 2/3 of PB in France, Italy, Belgium and Luxembourg)Revenues 3,887 3,748 3,810 3,816 3,783 3,737 3,792 3,820Operating Expenses and Dep. -2,559 -2,539 -2,443 -2,897 -2,528 -2,531 -2,454 -2,888Gross Operating Income 1,328 1,209 1,367 919 1,255 1,205 1,338 933Cost of Risk -252 -246 -213 -305 -320 -251 -205 -269Operating Income 1,077 963 1,154 615 935 955 1,133 664Share of Earnings of Equity-Method Entities 4 1 2 -6 0 5 -3 -6Other Non Operating Items 4 2 -6 1 -2 0 1 1Pre-Tax Income 1,085 966 1,149 610 932 960 1,132 659
Allocated Equity (€bn, year to date) 25.7 25.7 25.7 25.5 25.2 25.0 24.7 24.4
29 RESULTS AS AT 31 DECEMBER 2019
1. Including 100% of Private Banking for the Revenues to Pre-tax income items
2. Reminder on PEL/CEL provision: this provision, accounted in the French Retail Banking's revenues, takes into account the risk generated by Plans Epargne Logement (PEL) and Comptes Epargne Logement (CEL) during their whole lifetime
€m 4Q19 3Q19 2Q19 1Q19 4Q18 3Q18 2Q18 1Q18
FRENCH RETAIL BANKING (including 100% of Private Banking in France)1
'Incl. Transformation, Restructuring and Adaptation Costs -420 -256 -335 -206 -481 -267 -275 -211Gross Operating Income -574 -336 -383 -363 -606 -405 -179 -295Cost of Risk -60 -1 7 -4 -74 1 -18 -19Operating Income -634 -337 -377 -367 -680 -404 -197 -314Share of Earnings of Equity-Method Entities 14 19 24 24 25 18 19 22Other Non Operating Items 62 20 81 623 -88 285 46 110Pre-Tax Income -558 -299 -272 280 -743 -101 -132 -183
36 RESULTS AS AT 31 DECEMBER 2019
ALTERNATIVE PERFORMANCE MEASURES (APM) - ARTICLE 223-1 OF THE AMF’S GENERAL REGULATION Alternative Performance Measures Definition Reason for use
Operating division profit and loss account aggregates (revenues, operating expenses, gross operating income, operating income, pre-tax income)
Sum of Domestic Markets’ profit and loss account aggregates (with Domestic Markets’ profit and loss account aggregates, including 2/3 of private banking in France, Italy, Belgium and Luxembourg), IFS and CIB
BNP Paribas Group profit and loss account aggregates = Operating division profit and loss account aggregates + Corporate centre profit and loss account aggregates
Reconciliation with Group profit and loss account aggregates is provided in the tables “Results by Core businesses”
Representative measure of the BNP Paribas Group’s operating performance
Profit and loss account aggregates, excluding PEL/CEL effect (revenues, gross operating income, operating income, pre-tax income)
Profit and loss account aggregate, excluding PEL/CEL effect
Reconciliation with Group profit and loss account aggregates is provided in the tables “Quarterly series”
Representative measure of the aggregates of the period excluding changes in the provision that accounts for the risk generated by PEL and CEL accounts during their lifetime
Profit and loss account aggregates of Retail Banking activity with 100% of Private Banking
Profit and loss account aggregate of a Retail Banking activity including the whole profit and loss account of Private Banking
Reconciliation with Group profit and loss account aggregates is provided in the tables “Quarterly series”
Representative measure of the performance of Retail Banking activity including the total performance of Private Banking (before sharing the profit & loss account with the Wealth Management business, Private Banking being under a joint responsibility of Retail Banking (2/3) and Wealth Management business (1/3)
Cost/income ratio Costs to income ratio Measure of operational efficiency in the banking sector
Cost of risk/Customer loans at the beginning of the period (in basis points)
Cost of risk (in €m) divided by customer loans at the beginning of the period
Details of the calculation are disclosed in the Appendix “Cost of risk on Outstandings” of the Results’ presentation
Measure of the risk level by business in percentage of the volume of outstanding loans
Doubtful loans’ coverage ratio
Relationship between stage 3 provisions and impaired outstandings (stage 3), balance sheet and off-balance sheet, netted for collateral received, for customers and credit institutions, including liabilities at amortised cost and debt securities at fair value through equity (excluding insurance business)
Measure of provisioning for doubtful loans
Net income Group share excluding exceptional items
Net income attributable to equity holders excluding exceptional items
Details of exceptional items are disclosed in the slide “Main Exceptional Items” of the results’ presentation
Measure of BNP Paribas Group’s net income excluding non-recurring items of a significant amount or items that do not reflect the underlying operating performance, notably transformation and restructuring costs.
Return on Equity (ROE) Details of the ROE calculation are disclosed in the Appendix “Return on Equity and Permanent Shareholders’ Equity” of the results’ presentation
Measure of the BNP Paribas Group’s return on equity
Return on Tangible Equity (ROTE)
Details of the ROTE calculation are disclosed in the Appendix “Return on Equity and Permanent Shareholders’ Equity” of the results’ presentation
Measure of the BNP Paribas Group’s return on tangible equity
37 RESULTS AS AT 31 DECEMBER 2019
Methodology – Comparative analysis at constant scope and exchange rates
The method used to determine the effect of changes in scope of consolidation depends on the type of transaction (acquisition, sale, etc.). The underlying purpose of the calculation is to facilitate period-on-period comparisons. In case of acquired or created entity, the results of the new entity are eliminated from the constant scope results of current-year periods corresponding to the periods when the entity was not owned in the prior-year. In case of divested entities, the entity's results are excluded symmetrically for the prior year for quarters when the entity was not owned. In case of change of consolidation method, the policy is to use the lowest consolidation percentage over the two years (current and prior) for results of quarters adjusted on a like-for-like basis. Comparative analysis at constant exchange rates are prepared by restating results for the prior-year quarter (reference quarter) at the current quarter exchange rate (analysed quarter). All of these calculations are performed by reference to the entity’s reporting currency. Reminder
Operating expenses: sum of salary and employee benefit expenses, other operating expenses and depreciation, amortisation and impairment of property, plant and equipment. In the whole document, the terms operating expenses or costs can be used indifferently.
Operating divisions: they consist of 3 divisions: – Domestic Markets including: French Retail Banking (FRB), BNL banca commerciale (BNL bc), Belgium Retail
Banking (BRB), Other Domestic Markets activities including Arval, Leasing Solutions, Personal Investors, Nickel and Luxembourg Retail Banking (LRB);
– International Financial Services (IFS) including: Europe-Mediterranean, BancWest, Personal Finance, Insurance, Wealth & Asset Management (WAM) that includes Asset Management, Wealth Management and Real Estate Services;
– Corporate and Institutional Banking (CIB) including: Corporate Banking, Global Markets, Securities Services.
38 RESULTS AS AT 31 DECEMBER 2019
STRONG GROWTH IN INCOME THANKS TO BUSINESS DRIVE AND TRANSFORMATION...................................................................................................................... 2
CONSOLIDATED PROFIT AND LOSS ACCOUNT ...................................................................... 24
4Q19 – RESULTS BY CORE BUSINESSES ................................................................................... 25
4Q19 – RESULTS BY CORE BUSINESSES ................................................................................... 26
QUARTERLY SERIES .................................................................................................................. 27
ALTERNATIVE PERFORMANCE MEASURES (APM) - ARTICLE 223-1 OF THE AMF’S GENERAL REGULATION ........................................................................................................... 36
39 RESULTS AS AT 31 DECEMBER 2019
5 FEBRUARY 2020
2019 FULL YEAR RESULTS
Disclaimer
The figures included in this presentation are unaudited.
On 29 March 2019, BNP Paribas issued a restatement of its quarterly results for 2018 reflecting, in particular (i) the internal transfer in the 3rd
quarter 2018 of Correspondent Banking activities within CIB from Corporate Banking business to Securities Services and (ii) the transfer,
effective 1st October 2018, of First Hawaiian Bank (FHB) from the BancWest business to the Corporate Centre following the sale of 43.6% of
FHB in 2018 (the remaining stake was sold on 25 January 2019). These changes do not affect Group results as a whole but only the analytical
breakdown of IFS (BancWest), CIB (Corporate Banking, Securities Services), and Corporate Centre. The 2018 quarterly result series have
been restated reflecting these effects as if they had occurred on 1st January 2018. This presentation is based on the restated 2018 quarterly
series.
This presentation includes forward-looking statements based on current beliefs and expectations about future events. Forward-looking
statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and
expectations with respect to future events, operations, products and services, and statements regarding future performance and synergies.
Forward-looking statements are not guarantees of future performance and are subject to inherent risks, uncertainties and assumptions about
BNP Paribas and its subsidiaries and investments, developments of BNP Paribas and its subsidiaries, banking industry trends, future capital
expenditures and acquisitions, changes in economic conditions globally or in BNP Paribas’ principal local markets, the competitive market and
regulatory factors. Those events are uncertain; their outcome may differ from current expectations which may in turn significantly affect
expected results. Actual results may differ materially from those projected or implied in these forward looking statements. Any forward-looking
statement contained in this presentation speaks as of the date of this presentation. BNP Paribas undertakes no obligation to publicly revise or
update any forward-looking statements in light of new information or future events. It should be recalled in this regard that the Supervisory
Review and Evaluation Process is carried out each year by the European Central Bank, which can modify each year its capital adequacy ratio
requirements for BNP Paribas.
The information contained in this presentation as it relates to parties other than BNP Paribas or derived from external sources has not been
independently verified and no representation or warranty expressed or implied is made as to, and no reliance should be placed on the fairness,
accuracy, completeness or correctness of the information or opinions contained herein. None of BNP Paribas or its representatives shall have
any liability whatsoever in negligence or otherwise for any loss however arising from any use of this presentation or its contents or otherwise
arising in connection with this presentation or any other information or material discussed.
The sum of values contained in the tables and analyses may differ slightly from the total reported due to rounding.
1. Cost of risk/Customer loans at the beginning of the period (in bp); 2. Group share; 3. Subject to the approval of the Annual General Meeting on 19 May 2020
Total exceptional operating expenses -€1,217m -€1,235m
Other non operating items • Capital gain on the sale of 16.8% of SBI Life and deconsolidation of the residual
stake3 (Corporate Centre) +€1,450m
• Capital gain on the sale of a building (Corporate Centre) +€101m
• Goodwill impairments (Corporate Centre) -€818m
• Capital gain on the sale of 30.3% of First Hawaiian Bank (Corporate Centre) +€286m
• Capital gain on the sale of a building (Corporate Centre) +€101m
Total exceptional other non operating items +€732m +€387m
Total exceptional items (pre-tax) -€485m -€848m
Total exceptional items (after tax)4 -€242m -€510m
Main Exceptional Items - 2019
Exceptional items 2018 2019
1. Related in particular to the integration of Raiffeisen Bank Polska and the discontinuation or restructuring of certain businesses (in particular BNP Paribas Switzerland);
2. Related in particular to BNL bc, Asset Management and BancWest; 3. 5.2% residual stake in SBI Life; 4. Group share
Revenues of the Operating Divisions - 2019 Revenue growth in all operating divisions
€m
Domestic Markets: revenue growth in a persistent low rate environment impacting the revenues of the networks negatively and continued growth in the specialised businesses
IFS: increase in revenues in connection with the business drive of Personal Finance and the very good performances of Insurance and Europe-Mediterranean – favourable foreign exchange effect this year
CIB: strong rise in revenues with very good performances of Global Markets and Corporate Banking
Domestic Markets1
International Financial Services
CIB
+4.7% constant scope &
exchange rates
Operating
divisions
2019
2018
+4.7%
1. Including 100% of Private Banking in France (excluding PEL/CEL effects), in Italy, Belgium and Luxembourg
2019 Full Year Results | 7
+3.5%
+6.1% +4.5%
10,707 10,741 10,054 10,507 8,163 8,663
+0.3%
Operating expenses of the Operating Divisions - 2019 Positive jaws effect – decrease in the cost income ratio in the 3 operating divisions
€m
Domestic Markets: decrease of costs in the networks (-0.5%2) and increase in the specialised businesses as a result of the development of the activity; positive jaws effect (+0.5 pt)
IFS: support of the increase in business, contained increase in operating expenses; positive jaws effect (+3.2 pt3)
CIB: increase on the back of the growth of the activity, continued active implementation of cost saving programmes; positive jaws effect (+5.5 pt)
+1.8% constant scope &
exchange rates
Operating
divisions
2019
2018
Domestic Markets1
International Financial Services CIB
+1.5%
1. Including 100% of Private Banking in France, Italy, Belgium and Luxembourg (excluding PEL/CEL effects); 2. FRB, BNL bc and BRB; 3. At constant scope and exchange rates
2019 Full Year Results | 8
Cost of risk - 2019 (1/2) Cost of risk/Customer loans at the beginning of the period (in bp)
• Cost of risk: €3,203m (+€439m vs. 2018)
• Low cost of risk
• €223m (+€192m vs. 2018)
• Low cost of risk
• Reminder: provisions offset by write-backs
in 2018 and 2017 12
25 6 2
15
2015 2016 2017 2018 2019
54 46 39 35 39
2015 2016 2017 2018 2019
Group
CIB – Corporate Banking
2019 Full Year Results | 9
Cost of risk - 2019 (2/2) Cost of risk/Customer loans at the beginning of the period (in bp)
• €1,354m (+€169m vs. 2018)
• Cost of risk low
• €490m (-€102m vs. 2018)
• Confirmation of the
decrease in the
cost of risk
• €55m (+€12m vs. 2018)
• Very low cost of risk
• €329m (+€41m vs. 2018)
• Cost of risk low
• €399m (+€91m vs. 2018)
• Moderate increase in the
cost of risk ; flat trend in
Turkey
• €148m (+€78m vs. 2018)
• Cost of risk low 161 124 111 75 64
2015 2016 2017 2018 2019
BNL bc
9 10 6 4 5
2015 2016 2017 2018 2019
BRB
24 24 21 16 17
2015 2016 2017 2018 2019
FRB
206 159 147 141 145
2015 2016 2017 2018 2019
Personal Finance
120 112 68 82 98
2015 2016 2017 2018 2019
Europe-
Méditerranean
9 14 17 14 27
2015 2016 2017 2018 2019
BancWest
2019 Full Year Results | 10
Very solid financial structure
CET1 ratio increase of 40bps
Reminder CET 1 as at 01.01.19: 11.7%
CET1 ratio: 12.1% as at 31.12.19 (+40 bps vs. 01.01.19)
2019 results excluding exceptional other non operating items, after taking into
account a 50% dividend pay-out ratio (+60 bps)
Increase at constant change of risk-weighted assets net of the impact of
securitisations (-40 bps)
Net impact of disposals and acquisition (SBI Life, deconsolidation of the residual
stake in this subsidiary, Prime Brokerage) as well as the partial goodwill
impairment of BancWest (+20 bps)
Overall limited impact of other effects, including change effect, on the ratio
Leverage ratio1: 4.6% as at 31.12.19
Immediately available liquidity reserve: €309bn2
(€308bn as at 31.12.18): room to manoeuvre > 1 year in terms of wholesale funding
308 309
31.12.18 31.12.19
Liquidity reserve (€bn)2
11.7% 12.1%
01.01.19 31.12.19
CET1 ratio
1. Calculated according to the delegated act of the EC dated 10.10.2014 on total Tier 1 Capital;
2. Liquid market assets or eligible to central banks (counterbalancing capacity) taking into account prudential standards, notably US standards, minus intra-day payment system needs
2019 Full Year Results | 11
Growing Net Tangible Book Value per share: €69.7
€3.10 / share dividend
Net book value per share end of period
Net tangible book value per share
Dividend1: €3.10 per share
(increase vs. 2018) • 50% payout ratio
• Paid in cash
• Dividend yield: 6.5%2
1. Subject to the approval of the Annual General Meeting on 19 May 2020, shares will go ex-dividend on 25 May 2020, payment on 27 May 2020; 2. Based on the closing price on 31 January 2020 €48.05
Continuous improvement of the ethics alert mechanism with internal communication about the optimisation of the mechanism and the processing rules to ethics alert officers
Advanced implementation of measures to strengthen the compliance and control systems in foreign exchange activities
Roll-out of the new Group homogeneous mechanism that tracks transactions and processes for money laundering and terrorism financing alerts finalised for the main entities
Evolution of centralised tools that filter transactions and screen customer databases, reinforcing the robustness of the compliance system
Market Integrity: a reinforced set-up on the back of the alignment with the Code of conduct of the Bank for International Settlements on foreign exchange markets
Continued the missions of the General Inspection dedicated to ensuring Financial Security: entities whose USD flows are centralised at BNP Paribas New York are audited at least once every 18 months. The 3rd round of audits of these entities, which started early 2018, was completed in July. The next one began back in September and is in the process of being carried out.
Compulsory annual e-learning programmes on financial security for employees (Sanctions & Embargos, Combatting Money Laundering & Terrorism Financing) which now includes a module dedicated to combating corruption
Online training programme on professional Ethics made compulsory for all new employees
Ever more solid compliance and control procedures
Continued operational implementation of a stronger compliance culture
Remediation plan agreed as part of the June 2014 comprehensive settlement
with the U.S. authorities mostly completed
2019 Full Year Results | 13
An Ambitious Policy of Engagement in Society The ambition to be a leader in sustainable finance
At the end of 2019, BNP Paribas established a ‘company purpose’ text reaffirming its support of major
transitions both with digital transformation and by setting the ambition to be a global leader in
sustainable finance.
Strong positions
in a growing
market
• #3 participant worldwide1 in the green bonds market at the end of 2019 with 9.8 billion
euros in green bonds in 2019 as joint bookrunner for its clients
• #1 financer of renewable energy projects in Europe1 and #3 in Asia-Pacific1 at the end
of September 2019
• €3.7bn Sustainability Linked Loans signed at the end of 2019, a financing tool indexed
on ESG2 criteria
• €47bn in SRI3 funds assets managed by BNP Paribas Asset Management at the end
of September 2019
1. Source: Dealogic; 2. Environmental, Social and Governance; 3. Socially Responsible Investment ; 4. Corporate Social Responsability
A recognised
CSR4 strategy
• Listed in the 2019 Dow Jones Sustainability Indices, World and Europe
• World's Best Bank for corporate responsibility in 2019 by Euromoney
• 1st solicited rating from Vigeo Eiris: A1+; 4th company worldwide (score
of 70/100)
• 2nd for climate performance in the EcoAct ranking of CAC 40 companies
• 1st French bank in the 2019 RobecoSAM rating ROBcCO AM*
4 EURONEXTv®garis~
2019 Full Year Results | 14
An Ambitious Policy of Engagement in Society Achievements and objectives in sustainable finance (1/2)
The UN
Sustainable
Development
Goals as a
compass
Accelerating
the ecological
and energy
transition
• Founding member of the UN Principles for Responsible Banking:
commitment to align the strategy with the SDGs1 and the Paris Agreement
• Target of €185bn to contribute to achieving the SDGs by the end of 2020
• SDG 5 (gender equality): €2bn in loans to support women in their
entrepreneurial projects in France in 2019
• SDG 10 (reducing inequalities): €6bn to support associations and social and
solidarity economy enterprises in 2020
• SDG 14 (life below water): commitment to support the preservation of the
ocean which includes €1bn to finance the ecological transition of ships by 2025
• Stopped financing companies whose principal business activity is related to the
unconventional oil & gas sector and stopped financing of new coal projects since
2017
• Decision to stop financing and reduce to nil the outstanding loans to companies
related to thermal coal by 2030 in the EU and 2040 for the rest of the world
• Objective to support the development of renewable energies revised upward
by €18bn in 2021
• €56m at the end of 2019 to support innovative start-ups in the energy transition,
• Loans: +4.1% vs. 2018, good loan growth in the retail networks in
particular in France and in Belgium and in the specialised
businesses (Arval, Leasing Solutions)
• Deposits: +7.2% vs. 2018
• Private banking: good asset inflows (+€5.6bn)
Broad and extensive support of our customers
in their digital usages
• Hello bank!: 2.7m clients1 (+3.3% vs. 31.12.181)
• Nickel: 1.5m accounts opened (+33% vs. 31.12.18)
• 56.5% of active digital clients2
• BNP Paribas leader in France in terms of digital
functionalities (D-Rating 2019 and 2018)
Domestic Markets - 2019 Good business drive, revenues up, positive jaws effect
165 174
79 77
106 111
48 52
2018 2019
Other DM
FRB
BNL bc
Loans €bn
BRB
397 414
169 185
44 46
125 131
44 46
2018 2019
Other DM
FRB
BNL bc
Deposits €bn
BRB
+7.2%
381 408
9.7 million digital clients3
• Effect of the rise in loan volumes
partially offset by the low interest
rate environment
• Strong increase in the specialised
businesses
Revenues4: €15,814m (+0.8% vs. 2018)
• Decrease in the cost of risk, in
particular at BNL
Pre-tax income6: €3,798m (+3.7% vs. 2018)
Operating expenses4: €10,741m (+0.3% vs. 2018)
+4.1%
1. Excluding Italy; 2. Share of active clients who connect at least once a month to the mobile app (on average in 4Q19), scope: individual customers, corporates and private banking of DM network or digital banks
(including Germany, Austria and Nickel); 3. Clients who connect at least once a month to the mobile app (on average in 4Q19 ) and clients of the digital bank - same scope as previous note.;
4. Including 100% of Private Banking, excluding PEL/CEL; 5. FRB, BRB and BNL bc; 6. Including 2/3 of Private Banking, excluding PEL/CEL
2019 Full Year Results | 18
Domestic Markets - 2019 Success of digital offerings – Leadership position in neobanks in Europe
Acceleration of mobile usages across all the Domestic Markets networks
5.1m customers active on mobile apps1 (+31% vs. 31.12.18)
97m monthly connections on mobile apps2 (+23.4% vs. 31.12.18)
Hello bank!
Success of the offering (easy and competitive related to payment, credit and savings) being
strengthened in France, Belgium and Italy on the targeted youth segment
Belgium: 506,000 customers as at 31.12.19, with 1 out of 3 youths under the age of 28
as a customer of HB!
France: 520,000 customers as at 31.12.19, of which 120,000 new customers in 2019.
Launch of new offers for millennials (freemium model)
Italy: Repositioning on customers under the age of 30 in addition to Smart, the new direct
offering of BNL3
Germany: > 1,500,000 customers as at 31.12.19
Nickel
3rd largest retail distribution network in France with 5,550 points of sale (+28% vs. 31.12.18),
leader in the neobank market in France and in the top 5 in Europe. Launch announced in
Spain for the Spring 2020.
1. Customers who connect at least once a month to the mobile app (on average in 4Q19), scope: individual customers, corporates and private banking of DM network or digital banks
(including Germany, Austria and Nickel); 2. Same scope, average observed in 4Q19; 3. Transfer of old HB! customers to the BNL Smart offering
2019 Full Year Results | 19
Strong
positions in
Private Banking
Leading position in a dynamic corporate market
#1 in France and in Belgium, #5 in Italy2
Assets under management increasing by 8.1% compared to 2018, with the levels of
net asset inflows representing 2.8% of assets under management at the end of 2018
A positive cooperation drive with the corporate business line, with net asset inflows
> €2.9bn (as at 31 December 2019)
Network banks that take a comprehensive and broad approach to the needs
of customers in connection with all the businesses of the Group
Domestic Markets - 2019
Corporates and Private Banking: an integrated model with strong,
profitable and growth-driven franchises
#1 in terms of customer penetration rate with corporates in France and in Belgium,
#3 in Italy1
Strong businesses with growth prospects at the core of the integrated model
Trade Finance: #1 in France and Belgium1 (revenues: +6.0% vs. 2018 for the whole of the
Domestic Markets scope)
Cash Management: #1 in France and in Belgium, #3 in Italy1 (fees: +7.6% vs. 2018 for the
whole of the Domestic Markets scope)
1. Source: Greenwich Share Leaders; 2. France: source ranking based on the amounts of assets under management as published by the main players in the market (public information),
Belgium: De Tijd, Italy: Italian Association of Private Banks
2019 Full Year Results | 20
Domestic Markets - 2019 A digital transformation that reinforces the model
Support
our customers
above and beyond
banking service
Offers integrated in the ecosystems of partners:
• Lyf Pay: electronic wallet (payment at point of sale, management of loyalty cards,
vouchers and money pots); sharp growth of the acceptance network and downloads:
2.7 million on a cumulative basis, +99% vs. 31.12.2018
• Telepass: a mobility offering for corporates and individuals in Italy
Corporates: 7,600 clients as at 31.12.19, of which 55% new clients for BNL one
year after launch
Individuals: 66,800 users as at 31.12.19, of which 79% new clients for BNL
within 9 months after launch
Continued end-to-end digitalisation in France, Italy and Belgium of 3 main customer
journeys: onboarding, mortgages and investment products
Automation of processes: > 700,000 transactions a month processed by robots
in the networks in 4Q19
Enhance
the operating
efficiency
and customer
satisfaction
Better use of data
in order to enhance
customer service
Roll-out of expanded customer knowledge tools in all countries
Ensure a multi-channel personalised conversation (on the basis of shared
digital assets) in order to enhance customer satisfaction
Personalisation of the customer interactions with a dynamic CRM
Enhance the effectiveness of marketing campaigns by leveraging knowledge of
the digital behaviour of customers in real-time
2019 Full Year Results | 21
DM - French Retail Banking - 2019 Sustained business drive and positive jaws effect Good sales and marketing drive
• Loans: +5.4% vs. 2018, good growth across all customer segments;
rise in particular in loans to corporates
• Deposits: +9.8% vs. 2018
• Private banking: rise in assets under management (+9.3%1 vs. 31.12.18) with
strong growth from responsible savings (€4.0bn in outstandings, +48% vs.
31.12.18 ) related to the launch of the financial advice tool, myImpact2
Very good development of the corporate franchise
• Rise in the number of onboardings (+27% vs. 2018), presence alongside the
most innovative companies (65% of French Tech 1203)
• Strong rise in cash management4 fees (+6.5% vs. 2018)
2018 2019
165 174
Loans €bn
+5.4%
31.12.18 31.12.19
Assets under management
(private banking1)
€bn
• Net interest income: +1.2%, in
connection with the rise in volumes
• Fees: -1.0%, decrease in charges
on fragile customers at the
beginning of the year
Revenues5: €6,328m (+0.3% vs. 2018)
Pre-tax income6: €1,261m (-0.2% vs. 2018)
• Decrease in costs: impact of cost
saving measures, optimisation and
streamlining of the network
• Positive jaws effect (+0.4 point)
Operating expenses5: €4,602m (-0.2% vs. 2018)
1. Excluding the internal transfer of a subsidiary; 2. Financial advisory solution for responsible investments in France; 3. List of the 123 French start-ups with strong potential selected by French Tech initiative; 4. Including payment instruments; 5. Including 100% of Private Banking excluding PEL/CEL effects; 6. Including 2/3 of Private Banking, excluding PEL/CEL effects
96 104
+9.3%
2019 Full Year Results | 22
1. Securitization of non-performing portfolios for €1.0bn in 2Q19 and €1.0bn in 4Q18 ; 2. 4Q19 based on information available at the end of November; 3. Including 100% of Italian Private Banking; 4. Including
2/3 of Italian Private Banking
DM - BNL banca commerciale - 2019
Strong rise in income due to decreasing in the cost of risk
Business growth in a lacklustre context
• Loans: -1.9% vs. 2018, -0.1% excluding the impact of the sale of
non-performing loans1, continued market share gains in the corporate
segment
• Deposits: +4.8% vs. 2018
• Continued rise in off balance sheet savings, in particular in life insurance
(+9.9% vs. 2018)
Launch of new digital services
• Launch of Apple Pay in mobile apps in Italy, thereby finalising the roll-out
of the agreement signed with Apple within the scope of Domestic Markets
5.3% 5.4% 5.6% 5.7%
4Q16 4Q17 4Q18 4Q19
Market share on the
corporate segment (loans)
Source: Italian Banking Association2
• Confirmation of the significant
decrease in the cost of risk (-17.3%)
Pre-tax income4: €443m (+24.3% vs. 2018)
• Slight decrease in net interest income:
-0.1% vs. 2018, impact of the low
interest rate environment and the
positioning on clients with a better risk
profile
• Fees: -1.1% vs. 2018
Revenues3: €2,778m (-0.5% vs. 2018)
• Effect of cost saving and adaptation
measures (Quota 100 early
departure plan)
Operating expenses3: €1,800m (+0.1% vs. 2018)
35.5 38.3
2018 2019
+8.0% €bn
Life insurance
and mutual
fund
outstandings
Off balance sheet savings
2019 Full Year Results | 23
1. Including 100% of Belgian Private Banking; 2. Including 2/3 of Belgian Private Banking
DM - Belgian Retail Banking - 2019
Good business drive, impact of low interest rates, continued cost
adaptation Growth in business activity
• Loans: +4.4% vs. 2018, good growth in loans to individual and corporate
customers
• Deposits: +5.1% vs. 2018
• Off balance sheet savings (+8.2% vs. 2018), strong rise in mutual funds
outstandings (+12.8%) and growth in life insurance outstandings
Continued evolution of the operational model
• Agreement of the Belgian four main banks to set up an integrated
network of ATMs that provides better coverage around the country in
order to be ever closer to customers
• Net interest income: -3.1% vs. 2018,
impact of low interest rates partially
offset by a rise in loan volumes
• Fees: +1.4% vs. 2018 Pre-tax income2: €929m (-5.1% vs. 2018)
• Effect of cost reduction measures
• Continuing branch network optimisation
(-88 branches vs. 31.12.18)
106.1 110.8
2018 2019
Loans
+4.4%
53.4 57.8
2018 2019
Off balance sheet savings
+8.2% €bn
€bn
Revenues1: €3,524m (-2.0% vs. 2018)
Operating expenses1: €2,480m (-1.6% vs. 2018)
2019 Full Year Results | 24
1. At constant scope and exchange rates; 2. Including 100% of Private Banking in Luxembourg; 3. Including 2/3 of Private Banking in Luxembourg
DM - Other Activities - 2019 Very good business drive, positive jaws effect and strong rise in income
Very good business drive of the specialised businesses
• Arval: strong growth of the financed fleet vs. 2018 for all segments
(+8.9%1 vs. 2018). Leading position confirmed on its perimeter of
27 countries and doubling of the number of white label partnerships
with automobile makers in Europe
• Leasing Solutions: rise in outstandings of +6.9%1 vs. 2018 combined with
an enhanced customer experience (75% of applications decided
automatically)
• Personal Investors (PI): rise in assets under management of +21.8%
vs. 31.12.18
• Nickel: very sharp rise (+366,000 accounts in 2019),
1.5 million accounts opened
Luxembourg Retail Banking (LRB):
• Growth in mortgage and corporate loans
Loans
Pre-tax income3: €1,165m (+9.5% vs. 2018)
• Good business development
across all the businesses
• Significant rise in Nickel revenues
Revenues2: €3,184m (+6.6% vs. 2018)
• As a result of business development
• Positive jaws effect (+2.1 pts)
Operating expenses2: €1,859m (+4.5% vs. 2018)
31.12.18 31.12.19
Arval financed fleet
Average fleet
in thousands
of vehicles
+8.9%1
1,156 1,255
2018 2019
€bn
+7.8%
10.3
LRB
PI
10.6
0.5
9.7
0.5
11.1
2019 Full Year Results | 25
Sustained business activity
• Outstanding loans: +8.1% vs. 2018 (+5.1% at constant scope and exchange
rates), good growth at Personal Finance and Europe-Mediterranean
• Net asset inflows: +€20.2bn, with in particular strong net asset inflows at
Wealth Management and good asset inflows in Insurance in particular in
unit-linked policies
• Rise in asset under management at €1,123bn, +9.3% vs. 31.12.18
• Signed new partnership agreements at Personal Finance and Insurance
Scope effect with the integration of Raiffeisen Bank Polska1
International Financial Services - 2019 Strong business growth and positive jaws effect
2018 2019
Outstanding loans €bn
+8.1%
31.12.18 31.12.19
1,123 1,028
Assets under management2
€bn
+9.3%
Pre-tax income: €5,226m (+4.5% vs. 2018)
• +6.7% at constant scope and exchange
rates
186
1. Reminder: closing of the transaction on 31.10.18; 2. Including distributed assets
172
• Good drive at Personal Finance
and very good performances of
Insurance and the Europe-
Mediterranean banking networks
• +4.7% at constant scope and
exchange rates
Revenues: €17,183m (+6.9% vs. 2018)
• Increase contained by cost saving
measures and operating efficiency
gains
• +1.5% at constant scope and
exchange rates
• Positive jaws effect (+2.4 pts)
Operating expenses: €10,507m (+4.5% vs. 2018)
2019 Full Year Results | 26
International Financial Services - 2019 Franchises strengthened to pursue growth
Enhanced leading
positions at the core
of the integrated
model
Supporting the
development of
partnerships
Personal Finance: #1 consumer credit specialist in Europe and a presence in 33 countries,
> 25 million clients
Europe-Mediterranean and BancWest: integrated retail and commercial banking model deployed
in 15 countries, > 15 million clients
BNP Paribas Cardif: global leader in creditor protection insurance with a presence in
34 countries
BNP Paribas Wealth Management: #1 private bank in the eurozone1,
Best Private Bank in the World (Global Finance 2019)
Real Estate Services: Leader in continental Europe, #1 in Germany
Asset Management: a global asset manager and leader in terms of sustainable finance with a
#1 position in terms of assets under management certified SRI in France and Febelfin in Belgium
Personal Finance
• Implementation of new partnerships in particular in the automobile sector
(Opel in Poland, Volvo in Italy, BYmyCAR in France, Ford in several
European countries) and in retail (Carrefour in Italy, Leroy Merlin in Brazil)
Insurance: 500 partnerships
• Strategic alliance with ScotiaBank to distribute insurance products
to its 9 million clients in 4 Latin America countries
• Strategic alliance with Sainsbury’s Bank and Argos and launch
of a new pet insurance offering
1. Ranking based on the amounts of assets under management as published by the main players in the market (public information)
48%
External
partners
52%
BNP
Paribas
networks
% of premiums generated
by BNP Paribas Cardif
2019 Full Year Results | 27
2016 2017 2018 2019
10%
International Financial Services - 2019 Digitalisation of customer service
A client service
optimised by the
digitalisation
in all the
businesses
3.9 million digital clients in the international
retail networks1
5.8 million electronic signatures at Personal Finance
Personal Finance:
% of electronic signatures
Adoption of digital solutions continuously on the rise
• Personal Finance: > 240 million self care transactions in 2019, 85% of total
transactions
• Europe-Mediterranean: launch at Cepteteb of an app dedicated to SME clients to
manage their accounts, self care operations and transactions
• Cardif: success of the digitalised creditor protection insurance journey in France:
90% of immediate responses for personal insurance (Cardif Libertés Emprunteur),
80% of immediate responses for collective insurance
• Wealth Management: 48% of digital active clients2
1. Europe-Mediterranean and BancWest; 2. Wealth Management clients with at least one connection per month
>50%
2019 Full Year Results | 28
International Financial Services - 2019 Open innovation and new technologies
Technology
in service of
transformed
business
models
Co-creation with start-ups: in client journeys, solutions offerings and in the
processes
• at , number 1 global start-up accelerator
> 400 start-ups presented in 3 years - 47 projects accelerated with 36 start-ups –
an industrialisation rate of 35% among the best fintech ecosystems
• : European set up for project acceleration based on agile development of innovating
solutions for our clients and skill improvement of our employees. It has doubled its capacity since
its creation in 2017
Continued development of robotics and acceleration of the number of Artificial
Intelligence projects
• About 150 projects using artificial intelligence already operational or in development
Natural language processing: automatic production of more than 100 funds comments
in Asset Management
Marketing direct: roll-out of a cognitive targeting solution at Personal Finance
Data Science: use of the Domino solution by BNP Paribas Cardif to facilitate the
end-to-end roll-out of projects
• >760,000 transactions a month processed by robots in the IFS businesses
• Remote contact with clients: video solutions, chat and co-browsing available via Gomobile at BNP
Paribas Bank Polska, holoportation1 with BNP Paribas Real Estate Services
STATION F
1. Interactive meeting in a virtual space via a hologram without physically being there
2019 Full Year Results | 29
IFS - Personal Finance - 2019 Good business drive and positive jaws effect
Continued sales and marketing drive
• Loan outstandings: +9.2% vs. 2018, rise in volumes with good control of
margins at production
• Business drive in Europe and within partnerships
• Success of the securitisation transactions in Europe (4 transactions for a
total amount of €3.8bn1)
Development of partnerships and cooperation
• Successful start-up of the partnership with Opel in new countries (Poland,
Netherlands, Spain)
• Entered into a pan-European agreement (Netherlands, Belgium,
Luxembourg, Poland) with Ford Europe for a 5-year period
• Partnership with Arval in the United Kingdom for a car inventory financing
solution for car dealers
• In connection with the favourable
volume effect
• Sustained growth in particular by the
very good drive in Italy, Spain and
Germany
Revenues: €5,796m (+4.8% vs. 2018)
• -0.6% excluding exceptional item2
• Impact of provisions in line with
outstandings
Pre-tax income: €1,602m (-2.7% vs. 2018)
• Positive jaws effect (+1.4 point) and
decrease in the cost income ratio
(-0.7 point vs. 2018) thanks to the
cost saving measures
• Support of increased business
Operating expenses: €2,857m (+3.3% vs. 2018)
1. Non-deconsolidating; 2.. Related to a non recurring item in one of the associated companies
84.7 92.4
2018 2019
+9.2%
Consolidated outstandings
Gross operating income
€bn
2,768 2,939
2018 2019
+6.2%
€m
2019 Full Year Results | 30
IFS – Europe-Mediterranean - 2019 Positive jaws effect and strong rise in income
Growth in business activity
• Loans: +1.4%1 vs. 2018, good growth in Poland and Morocco
• Deposits: +1.2%1 vs. 2018, optimisation in Poland (decrease in most
expensive deposits), up in all other countries
• Business drive sustained by the universal bank model and the
strengthening of the franchises
Progress in the integration of Raiffeisen Bank Polska
• Ongoing delivery of cost synergies: €39m achieved in 2019. Closure
of 188 branches
• Successful finalisation of the operational integration
Loans Deposits
• Up in all regions
• Effect of increased volumes
and margins, and good level of
fees
Revenues2: €2,699m (+6.8%1 vs. 2018)
• +6.5% at historical scope and exchange
rates
• Reminder: unfavourable foreign exchange
effect (strong depreciation of the Turkish lira)
Pre-tax income3: €728m (+23.1%1 vs. 2018)
• Good cost containment, largely
positive jaws effect (+5.9 pts)
• Effect of transformation measures in
all regions
Operating expenses2: €1,799m (+1.0%1 vs. 2018)
1. At constant scope and exchange rates (see data at historical scope and exchange rates in the appendix); 2. Including 100% of Turkish Private Banking; 3. Including 2/3 of Turkish Private Banking
2018 2019
€bn
+1.4%1
35.9 38.2
2018 2019
€bn
+1.2%1
35.4 40.5
2019 Full Year Results | 31
1. At constant scope and exchange rates (USD vs. EUR average rates: +5.5% vs. 31.12.18; figures at historical scope and exchange rates in the appendix);
2. Deposits excluding treasury activities; 3. Including 100% of Private Banking in the United States; 4. Including 2/3 of Private Banking in the United States; 5. Including external assistants
IFS - BancWest - 2019 Decrease in costs in a context of falling rates
Business drive
• Loans: +1.2%1 vs. 2018, growth in individual and corporate loans
• Deposits: +3.9%1 vs. 2018, good growth in customer deposits2
(+5.4%)
Development of cooperation with the rest of the Group
• Strong increase of Private Banking: good net asset inflows,
$15.7bn of assets under management as at 31.12.19
(+14.3% vs. 31.12.18)
• Increase in the cooperation with CIB: 57 deals made jointly in 2019
(+8% vs. 31.12.18)
Loans1
$bn
• Decrease in net interest margin
due to falling rates partially
offset by increased business
activity and fees (in particular
cards and cash management)
Revenues3: €2,375m (-1.8%1 vs. 2018)
• -5.5% at historical scope and
exchange rates (positive foreign
exchange effect)
• Increase in provisions compared to
a low base in 2018
Pre-tax income4: €484m (-10.0%1 vs. 2018)
• Decrease in costs: reduction of
headcount5 (-7.2% vs. 31.12.18),
mutualisation of some functions with
CIB and transfer of support functions in
a less costly area (Arizona)
Operating expenses3: €1,712m (-3.6%1 vs. 2018)
2018 2019
Customer deposits1
+5.4%
54.6 57.5
2018 2019
+1.2%
60.8 61.5
$bn
2019 Full Year Results | 32
IFS - Insurance and WAM1 - Asset Flows and AuM - 2019 Good level of net asset inflows and favourable market evolution
Wealth
Management:
393
Asset Management
including Real Estate
Investment Management3:
470
Insurance:
260
€bn
1,123
31.12.19 31.12.18
Total
1,028
Evolution of assets under management2
Assets under management2
as at 31.12.19
Assets under management: €1,123bn as at 31.12.2019
• +9.3% vs. 31.12.18
• Very favourable performance effect: +€79.7bn on the back
of the rebound of financial markets
• Others: deconsolidation of SBI Life as at 30.06.19 (-€3.6bn)
Net asset inflows: +€20.2bn as at 31.12.2019
• Wealth Management: good net asset inflows, in particular
in Asia, Germany and Belgium
• Asset Management: slight asset outflows related to the money
market funds; good net asset inflows in Real Estate Investment
Management in Germany and France
• Insurance: good asset inflows in particular in unit-linked
policies, good growth in Asia
+20.2
Net asset
flows
Performance
effect
Foreign
exchange
effect Others
+79.7 +3.3
-8.0
1. WAM: Wealth & Asset Management, i.e. Asset Management, Wealth Management and Real Estate Services; 2. Including distributed assets; 3. Assets under management of Real Estate Investment
Management: €30bn
€bn
2019 Full Year Results | 33
IFS – Insurance - 2019
Good business growth – sharp rise in income
Continued business development
• Continued diversification in savings inflow with a growing share in
unit-linked policies in particular in France and in Asia
• Good growth in protection insurance in Europe and in Latin America
• Continued development of property and casualty insurance offering
in the FRB network via Cardif IARD
New digital offerings and new partnerships
• In France, personal creditor protection insurance with a new fully
digitalised journey (90% of immediate responses)
• In Latin America, strategic alliance with Scotiabank in
4 countries, and in Mexico with Famsa, a leading retailer
• In United Kingdom, strategic alliances with Sainsbury’s Bank and
Argos to develop pet insurance
• Good business drive
• Favourable effect of the rise of
markets
Revenues: €3,068m (+14.5% vs. 2018)
• +19.2% at constant scope and
exchange rates
• Scope effect related to the
deconsolidation of SBI Life
Pre-tax income: €1,716m (+16.0% vs. 2018)
• As a result of business development
• Positive jaws effect
Operating expenses: €1,500m (+6.7% vs. 2018)
2,680 3,068
2018 2019
Revenues
€bn +14.5%
1,273 1,568
2018 2019
€bn +23.1%
Gross operating income
2019 Full Year Results | 34
IFS - Wealth and Asset Management1 - 2019
Overall growth, impact of the favourable market effect
Wealth Management
• A recognised global expertise
• Good developments in Asia, United States and Germany
Asset Management
• Amplification of the organisation adaptation: overhaul of sales and
product life cycle management operating processes
• Successful roll-out of the Aladdin management system: migration of
managed portfolios and gradual decommissioning of 50 applications
• Continuous transformation and development of new solutions (ESG,
quantitative solutions, multi assets, private debt and real assets, etc.)
Real Estate Services
• Very good level of activity in advisory and in property development in
particular in Germany and in France
• Launch of the first marketplace dedicated to coliving2 in Europe
• Continuous improvement over the
year after a difficult start to the year
due to the financial market crisis at
the end of 2018
Revenues: €3,320m (+1.0% vs. 2018)
Pre-tax income: €695m (+2.0% vs. 2018)
• Effect of the transformation plan
measures, in particular in Asset
Management
Operating expenses: €2,682m (+1.7% vs. 2018)
1. Wealth Management, Asset Management and Real Estate Services; 2. Coliving: a flexible type of housing halfway between conventional flat-sharing and a hotel:3. Banking network category
A recognised global expertise
Best Private Bank in the World
(Global Finance)
Best Global European Private Bank
and Best Philanthropy Offering
(Private Banker International)
wNMASit*t
Corbeille d’or over one year3, Corbeille
Long terme over 5 years3, best range of
diversified funds over 1 year
3,286 3,320
2018 2019
€m +1.0%
Revenues (WAM)1
2019 Full Year Results | 35
2,962
3,395
2,681
3,207
2016 2017 2018 2019
• Growth in all three operating divisions
• Sharp rise at Global Markets (+20.7%2)
• Very good performance of Corporate
Banking (+6.5%2)
• Growth at Securities Services (+3.0%3)
• Contained increase thanks to the
effect of cost saving measures
(development of shared platforms
and optimisation of processes, etc.)
• Very positive jaws effect (+5.5 pts)
1. Source: Coalition Proprietary Analytics, Index as at 30.09.19; EMEA: Europe, Middle East, Africa; 2. Excluding the effect of the creation of the Capital Markets platform (transfer of €136m of revenues from Global
Markets to Corporate Banking in 2019); 3. Excluding the positive impact of the revaluation of an equity stake in 4Q18 and of a specific transaction in 2Q19
Growth sustained by the development of client franchises
within the integrated model
• Positions strengthened on targeted corporate and institutional client bases
• Increase in business leveraging market share gains
• 3rd largest player in EMEA1
Rapid progress in the transformation of CIB
• Discontinuation or optimisation of businesses
• Continued industrialisation (€298m in recurring cost savings in 2019) and
digitalisation
• Good containment of risk-weighted assets: growth (+5.4% vs. 2018) below
that of the business
Corporate & Institutional Banking - 2019
Success of the action plan announced at the beginning of 2019
Revenues: €12,080m (+11.6% vs. 2018)
Operating expenses: €8,663m (+6.1% vs. 2018)
Pre-tax income: €3,207m (+19.6% vs. 2018)
€m
+19.6%
CIB rankings in EMEA1
2019 Full Year Results | 36
#5
#4
#3
#2
#1
9M19 revenues in €bn
(including the
United Kingdom)
CIB: Global Markets - 2019
Very sustained growth of the business and strong revenue growth
Global Markets market
share
Strong drive leveraging market share gains
• Market share gains in particular in FICC across all segments1
• Bond issues: #1 in EMEA, #1 for all bonds in Euros, #8 for international
issues2
• Currency Derivatives House of the Year (Risk Awards 2019)
Development of leading positions on electronic platforms
• Multi-dealer platforms: top 3 on credit derivatives in Euro and emerging
market bonds in local currencies, top 5 in swaps and bonds in Euro
• +20.7% excluding the effect of the creation of the Capital Markets
• platform with Corporate Banking
• FICC: +36.0%3 sharp rise in primary markets and credit, sharp
rebound in forex and emerging markets and very good performance
in rates
• Equity & prime services: stable vs. 2018, gradual recovery in 2019
from a low point at the end of 2018, good performance on equity
derivatives in particular on structured products
3.5 3.9
2018 9M19
Evolution of the global market share
as a % of the total revenue pool1
805 729 680 505
1,035 793 915 820
692 718 452
145
488 615 384 520
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19
650
1,447 1,498
Equity &
Prime
Services
FICC
1,523
1,132
1,409
4,727
1,299 1,340
5,571
1. Source: Proprietary Analytics Coalition, based on the BNP Paribas product scope and at a historical exchange rate; 2. Source Dealogic December 2019 bookrunner in volume;
3. Excluding the effect of the introduction of the Capital Markets platform (transfer of €136m of revenues from FICC Global Markets to Corporate Banking in 2018)
Revenues: €5,571m (+17.9% vs. 2018)
€m
+0.4 pt
2019 Full Year Results | 37
Investment Banking EMEA
• +6.5% excluding the effect of the creation of the Capital Markets platform with
Global Markets5
• Strong development driven by the ramping up of the Capital Markets platform in
Europe (revenues: +12.8% vs. 2018)
• Development of transaction businesses globally (+11.5% vs. 2018)
CIB: Corporate Banking - 2019
Business growth across all targeted client bases Success of development initiatives
• #1 European player in terms of investment banking transactions in EMEA1
with a very good start in early 2019 of the Capital Markets platform, in
partnership with Global Markets
• > 50 new corporate clients in Europe, in particular in targeted countries
(Germany, United Kingdom, Netherlands and Scandinavia)
• Continued business development in the Americas and Asia-Pacific
in particular on cross-border deals
Strong business drive
• Strong growth in fees (+7.2% vs. 2018) and rise in loan outstandings
(€146bn, +7.5% vs. 2018)2
• #1 in Europe confirmed on large corporates for corporate banking,
cash management and trade finance3
• #1 for syndicated loans in the EMEA4 region
Revenues: €4,312m (+9.9% vs. 2018)
3.7% 3.9% 4.1%
2017 2018 2019
#10 #9
Evolution in ranking and market
share in revenues1
#6 1st European player
Corporate Banking in Europe
1. Europe, Middle East & Africa, source: Dealogic December 2019; 2. Average annual outstandings at constant scope and exchange rates; 3. Source: Greenwich Share Leader survey in Large Corporate Banking, Cash
Management and Trade Finance; 4. Source Dealogic December 2019, bookrunner in volume; 5. Transfer of €136m of revenues from FICC Global Markets to Corporate Banking in 2019
Penetration rate as %
on large corporates3
39 40 62
TradeFinance
CashManagement
CorporateBanking
#1 #1
#1
2019 Full Year Results | 38
• +3.0% excluding non-recurring items4
• Related to the rise in assets (+8.2% on average vs. 2018)
and that of transactions (+2.3% on average)
• Strong growth in the Asia-Pacific region (+18% vs. 2018)
Revenues: €2,198m (+0.9% vs. 2018)
CIB: Securities Services - 2019
Continued good business development
Excellent business drive
• Implementation of the partnership with Janus Henderson
in the United States
• Major mandates renewed: Axa Group in 7 European countries
• Development of partnerships with platforms to expand the
service offering: Allfunds1 (fund distribution), AssetMetrix
(private equity) or FFYN (exchange of information)
Rise in assets under custody and under
administration (+12.3% vs. 31.12.2018)
• Positive effect of the integration of Janus Henderson’s assets
since the end of March 2019
• Gradual rebound of the equity markets after a sharp fall in
4Q18
• Strong growth in the administration of private capital funds3
(+23% vs. 31.12.2018)
6.5 7.1 8.8 9.9 10.6 11.7 11.6
13.1
2012 2013 2014 2015 2016 2017 2018 2019
end of period
in €000bn
CDC €330bn
Generali €180bn
UniSuper AUD50bn
Major
mandates
Sampo €25bn
Mapfre: €60bn AIIB: ~€18bn
Actiam: €56bn
+10.5% CAGR2
Assets under custody and under administration
Carmignac €40bn
Janus Henderson
€138bn
As*aRtek BNPPanbasAwards Securities Services, - Custodian of 'he year
llM'BaiikrrTRANSACTIONBANKING•viSHl;'. ravj
Recognised global expertise
• Bank of the Year for securities services (The Banker)
• Custodian of the Year in Asia (AsiaRisk) and award-winning
for Stock Connect programmes (The Asset)
1. Subject to the approval of the regulatory authorities and the necessary authorisations; 2. Average annual growth rate; 3. Private equity, loans and infrastructures;
4. Excluding the revaluation of an equity interest 4Q18 and a specific transaction in 2Q19
2019 Full Year Results | 39
Generalisation
of digital
platforms and
their usage by
clients
Digitalisation of client journeys
• >11,500 corporate clients amounting to >106,000 users on
the Centric platform at the end of 2019
• Global Markets: >21 million electronic orders processed in
2019 for clients
• >6,000 institutional clients amounting to >37,000 users on
the Neolink platform of Securities Services
Corporate & Institutional Banking - 2019
Digitalisation and transformation of the operating model
2,800
19,000
2015 2016 2017 2018 2019
Centric
Trend in the number
of daily connections
Improvement of
operating
efficiency and
customer service
Digitalisation and automation of processes
• 250,000 monthly operations processed in 4Q19 by robots
in Securities Services (x4 since the beginning of 2019)
• Roll-out at CIB of the Welcome platform (KYC)
developed and used by Domestic Markets
Ramping up of service platforms
• 35% of CIB teams located in mutualised platforms
(Portugal, Canada, India, etc.)
80% 68% 65%
20% 32% 35%
2018 2015 2019F
Mutualised platforms
New offers to
clients developed
in partnership
with Fintechs
Active cooperation with fintechs in the three business lines
• Global Markets: Symphony (a communication and collaboration platform), Directbooks
(syndication), Kantox (foreign exchange hedging solution for corporates), etc.
• Corporate Banking: Cashforce (cash management for clients), TradeIX (trade finance), etc.
• Securities Services: Fortia (analysis, control and regulatory reporting), AssetMetrix
(private equity), etc.
2019 Full Year Results | 40
Corporates:
strengthening of
leading positions
in Europe
Institutionals:
major initiatives
Success of country development plans in Europe
• >260 new corporate group clients since 2016 (of which>50 in
2019) in particular in targeted countries (Germany, United
Kingdom, Netherlands and Scandinavia)
• Close to 1,500 onboardings of multinational clients’ subsidiaries
in 2019
• Intensification on the current country target and expansion to
Spain and Italy in close association with BNL
Developments in the APAC and Americas regions
• Asia-Pacific: n°2 for the 1st time in trade finance1 and
continuous development in the Chinese market
• Americas: reinforced cooperation with BancWest and 44
onboardings in the Hispanic region
Reinforcement of Prime Brokerage
• Beginning of the transition period with the first transfers of
Deutsche Bank IT teams
• Objective to accelerate the growth of business on fund
manager clients
Partnership agreement with wealthtech Allfunds
• Planned contribution of certain activities in exchange for a
strategic 22.5% equity stake in Allfunds, world’s leader in fund
distribution services2
Corporate & Institutional Banking - 2019
Strenghtening of client franchises (1/2)
1. Source: Greenwich Share Leaders; 2. Subject to the approval of the regulatory authorities and the necessary authorisations; 3. Source: 9M19 Coalition Proprietary Analytics; 4. Source: 2018 Coalition
Prime brokerage4
1 2 3 4 5 6 7 8 9 10 11
Potential
Top 5
BNP
Paribas
CIB-EMEA market share
in % of the revenue
pool3
3.5 4.1
2016 9M19
+0.6pts
Expected effect of the agreement
with Deutsche Bank
2019 Full Year Results | 41
Cooperation and proximity with clients
enhanced by the integrated model
• Continuation of joint initiatives on transaction banking (cash
management and trade finance centres of expertise,
One Bank initiative, etc.)
• CIB solutions expanded proposal to major Domestic Markets
and IFS clients (debt market, advisory, hedging, etc.)
• Development and manufacturing of investment products and
their distribution to investor clients
A global and joint approach strengthening all the businesses
of the Group
• Closer strategic relationship with major clients
• Revenues of Domestic Markets and IFS associated with clients covered
by CIB: over €2.8bn in annual revenues generated
• CIB revenues associated with clients covered by Domestic Markets and
IFS: over €500m in annual revenues generated
Corporate & Institutional Banking - 2019
Strenghtening of client franchises (2/2)
DM and IFS revenues linked
to clients covered by CIB
IFS
DM
CIB
IFS DM
Client
bases
53%
47%
Breakdown in %
(11 months 19 basis)
2019 Full Year Results | 42
2020 OBJECTIVES 4Q19 DETAILED RESULTS
DIVISION RESULTS
APPENDIX
GROUP RESULTS
Adjustment of monetary policies in the
summer of 2019 with interest rates lower than
anticipated
Economic context
Growth in an interest rate environment lower than anticipated
Well oriented economic growth in
Europe and in Emerging Markets
1.2 1.4 1.4 1.4
2019 2020E 2022E 2021E
2.4 2.1
1.8 1.6
1.8 1.6
2019 2020E 2022E 2021E
3.9 4.6 4.8 4.8
2019 2020E 2022E 2021E
1. Source: IMF projections, October 2019
Impact of low interest rates concentrated on interest bearing products of the network banks of the
Eurozone
Diversified model, business drive and cooperation between the businesses continuing to generate
growth in this environment
Source: - - - Bloomberg consensus, January 2019; Bloomberg consensus, January 2020
US GDP1
Eurozone GDP1
Emerging markets GDP1
3.4 3.7
2.8
1.3 1.3
1.2
1.5
0.7 0.1
0.0
10Y BTP
10Y
OAT 10Y
OLO
and
3.1 3.2
2.7 1.9
2.0 10Y T Notes
2018 2019 2020E
2019 Full Year Results | 44
Strong business drive
Full contribution of the diversified and integrated model
D M
Acceleration of the business drive and development of revenues by leveraging our
leading positions in the specialised businesses and on corporate and private banking
client bases with the strength of the integrated model
Continued development of innovative digital offerings to acquire new customers
and support evolving usages
Intensification of the growth of the businesses by leveraging our best in class
offerings, our platforms and our distribution partnerships and networks
Selective development of retail banking outside the Eurozone and
intensification of the contribution of cooperation with the Group within the
integrated model I F S
Strengthening of the leading position in Europe on corporates with the
intensification of the country development plans and the success of Capital Markets
and continue reinforcement on institutionals with the integration of Deutsche
Bank’s Prime Brokerage platforms
Capitalising on the global presence with targeted initiatives in Asia-Pacific
(China, etc.) and in the Americas (Brazil, Mexico, etc.) and continuation of the
development of cooperation with the Group
I F S
C I B
2019 Full Year Results | 45
DM IFS CIB
2020 Operating divisions
Growth in a diversified revenue model
• Moderate decrease in revenues: impact of the interest rates in the networks partly offset by increased business with all client bases and strong growth of the specialised businesses
• Neutral jaws effect: decrease of operating expenses in the networks and support of growth in the specialised businesses
• Revenue growth sustained by the good business drive in all the IFS businesses and the development of partnerships
• Positive jaws effect: support of increased business and full contributions of the levers of the transformation plan
• Continued revenue growth sustained by new market share gains and the cooperation with the businesses of the Group.
• Positive jaws effect: cost saving efforts and effects of business growth
* Pre-tax return on notional equity
Year of pressure on the net interest income of the network banks of the Eurozone
Business growth in all the operating divisions: continued business drive and strengthening of
the franchises in the integrated model
Full contribution of the transformation plan: operating efficiency gains, optimised operating
models, new business development opportunities
2019 Full Year Results | 46
0.9 1.1 0.7
0.0
2017 2018 2019 2020
One-off transformation
costs
€bn
Cumulated recurring
cost savings
0.5 1.1
1.8
3.3
2017 2018 2019 2020
€bn
Transformation plan A concrete transformation generating cost savings in 2020
Digitalisation of customer
journeys and increase of
digital usages
Industrial use of new
technologies (robotisation,
artificial intelligence, CRM,
etc.)
Realised
Objective
€2.7bn
Reminder: €0.3bn reduction in 2019
(10% of the initial objective)
No transformation costs
in 2020
€3.3bn
Cost savings:
€1.8bn since the launch of the
plan
Insourcing of solutions &
external offerings and
partnerships with fintechs
Introduction of specialised
and shared platforms and
optimisation of the
business organisation €0.7bn positive impact
on costs Cost savings expected in
2020: €1.5bn
Reminder: Initial target of €2.7bn
announced in 2017
2019 Full Year Results | 47
2020 Exceptional items
Transformation contribution enabling the adjustment of the property portfolio
Ramping up of remote work and flex offices (47% of the office space in the Paris metropolitan area)
Buildings sales generating €500m in one-off capital gains in 2020
Reinforcement of the IT system to support increased digital usages
One-off IT costs in 2020: €200m
Restructuring and adaptation measures
Restructuring costs (in particular Prime Brokerage): €100m
1.1st time application of IFRS 9 (-10bps, fully loaded) and deduction of the Irrevocable Payment Commitments (IPC) from the prudential capital (-10bps) ; 2. Impact as at 01.01.19 of the first time application of the new accounting standard IFRS 16 (leasing) (-10bps)
12% CET1 ratio target already reached in
2019
12.1% CET1 ratio as at 31.12.19
well above the requests notified by the SREP
Average growth of the CET1 ratio:
35 bps / year over the period 2014-2019
IFRS 9 and
IPC1 (-20bps)
CET1 ratio evolution
IFRS 162
(-10bps)
2019 Full Year Results | 49
Capital
Well-positioned to face the finalisation of Basel 3
Increase (expected in 2023)
of risk-weighted assets contained
at 10% for BNP Paribas
• Based on the positions of European governing
authorities on keeping exemptions (SME
supporting factor, CVA, etc.)
• And potential management actions
CET1 ratio well above
current notified requests
Regular and solid capital
generation
Adjustments expected on the
capital requests by the supervisor
• Partial coverage of the P2R by AT1 and T2
pursuant to CRD5 (article 104a)
• Recalibration of Pillar 2 requests
2019 Full Year Results | 50
2020 Objectives
BNP Paribas confirms the strength of its model and its long-term capacity to create value
in changing economic, technological, environmental, regulatory & societal environments.
Business growth in all the operating divisions: strong business drive
and contribution of the diversified and integrated model
ROTE target of 10% in 2020
Decrease in absolute value of operating expenses, positive jaws
effect with the full benefit of the transformation plan
Continued reinforcement of the franchises in the integrated model.
Ongoing development of CIB businesses and strengthening of its
European leadership
Reinforced leadership in sustainable finance and ambitious policy of
engagement in society
Objective of 50% dividend pay-out ratio in cash1
Towards a more efficient and more digital operating model
serving customers and employees
1. Subject to the shareholder approval at the Annual Meeting
Other non operating items • Capital gain on the sale of a building (Corporate Centre) +€101m
Total exceptional other non operating items +€101m
Total exceptional items (pre-tax) -€319m -€481m
Total exceptional items (after tax)3 -€242m -€341m
Main Exceptional Items – 4Q19
Exceptional items 4Q18 4Q19
1. Related in particular to the integration of Raiffeisen Bank Polska and the discontinuation or restructuring of certain businesses (in particular BNP Paribas Switzerland);
2. Related in particular to BNL bc, Asset Management and BancWest; 3. Group Share
2019 Full Year Results | 53
Consolidated Group – 4Q19
Strong growth in income – Very positive jaws effect
Including 100% of Private Banking in France (excluding PEL/CEL effects), Italy, Belgium, Luxembourg, at BancWest and TEB for the Revenues to Pre-tax income line items
DEPOSITS AND SAVINGS 189.1 +10.3% +0.3% 185.2 +9.8%
Current Accounts 120.9 +14.2% +1.5% 116.6 +13.1%
Savings Accounts 61.7 +4.0% -0.3% 61.5 +3.3%
Market Rate Deposits 6.4 +4.3% -13.9% 7.1 +17.8%
%Var/ %Var/
€bn
OFF BALANCE SHEET SAVINGS
Life Insurance 96.1 +7.7% +1.0%
Mutual Funds 34.0 -6.8% +10.9%
%Var/2018
31.12.19
%Var/4Q18 %Var/3Q19
31.12.18 30.09.19
2019 Full Year Results | 59
DM – BNL banca commerciale – 4Q19
Including 100% of the Italian Private Banking for the Revenues to Pre-tax income line items
Revenues: +4.6% vs. 4Q18
• Net interest income: +8.1% vs. 4Q18, impact of a positive non-recurring item partially offset by the impact of the low interest rate environment and the positioning on clients with a better risk profile
• Fees: -0.7% vs. 4Q18
Operating expenses: +2.2% vs. 4Q18
• Contained increase thanks to cost reduction measures effect; impact in particular of higher contributions to the deposit guarantee scheme in Italy
• Positive jaws effect
Cost of risk: -33.5% vs. 4Q18 - Continued decrease in the cost of risk
Pre-tax income: €181m (+72.6% vs. 4Q18) - strong rise in income
Financed vehicles ('000 of vehicles) 1,298 +9.1% +2.7% 1,255 +8.9%
%Var1/2018%Var
1/3Q19%Var
1/4Q18
Average outstandings (€bn)4Q19 2019
2019 Full Year Results | 66
International Financial Services - 4Q19
Foreign exchange effect: appreciation of the dollar offset by the depreciation of the Turkish Lira
• USD/EUR1: +3.1% vs. 4Q18, +0.4% vs. 3Q19, +5.5% vs. 2018
• TRY/EUR1: -2.1% vs. 4Q18, -1.8% vs. 3Q19, -10.5% vs. 2018
At constant scope and exchange rates vs. 4Q18
• Revenues: +8.3%, growth driven in particular by the very good performance of Insurance, Real Estate Services, Personal Finance and retail networks of Europe-Mediterranean
• Operating expenses: +1.6%, increase contained by cost saving measures and efficiency gains, largely positive jaws effect (+6.7 pts)
• Positive impact of the strong rebound of financial markets for Wealth Management and Asset Management
• Very good growth for Real Estate Services in Germany and in France
Operating expenses: +4.3% vs. 4Q18
• Related to the cost associated to the very good performance of Real Estate Services and the development of Wealth Management. Decreased costs in Asset Management (gradual effect of transformation plan measures)
Pre-tax income: +48.1% vs. 4Q18
• In connection with the very good performance of Real Estate Services
• Sharp rebound at Global Markets (+114.6%1) compared to a particularly challenging context in 4Q18
• Good underlying performance of Corporate Banking (+4.8%1) and Securities Services (+4.2%2)
Operating expenses: +16.2% vs. 4Q18
• Contained increase in connection with strong business growth
• Largely positive jaws effect due to cost saving measures (€116m in 4Q19)
Cost of risk: down vs. 4Q18
Allocated equity: +4.3% vs. 2018
• Increase related to strong growth in business and volumes, good containment of risk-weighted assets
1. Excluding the effect of the introduction of the Capital Markets platform (transfer of €55m of revenues from Global Markets to Corporate Banking in 4Q19);
2. Excluding the positive impact of the revaluation of an equitystake in 4Q18
Revenues: +114.6% vs. 4Q18 excluding the effect of the creation of Capital Markets
• Equity & Prime Services: very sharp rebound vs. 4Q18 (reminder: impact of extreme market movements and loss on index derivatives hedging in the United States in 4Q18); very good derivatives client business in particular from structured products
• FICC (+73.3% vs. 4Q181): very strong growth across all the segments (rates, forex, credit and primary market)
Operating expenses: +33.5% vs. 4Q18 excluding the effect of the creation of Capital Markets
• Rise contained by the effects of cost saving measures and largely positive jaws effect
1. Excluding the effect of the creation of the Capital Markets platform (transfer of €55m of revenues from Global Markets to Corporate Banking in 4Q19)
Gross Operating Income -574 -606 -336 -1,657 -1,486
Cost of Risk -60 -74 -1 -58 -110
Operating Income -634 -680 -337 -1,715 -1,596
Share of Earnings of Equity-Method Entities 14 25 19 81 84
Other Non Operating Items 62 -88 20 786 353
Pre-Tax Income -558 -743 -299 -848 -1,159
1. Related in particular to the integration of Raiffeisen Bank Polska and the discontinuation or restructuring of certain businesses (in particular BNP Paribas Switzerland); 2. Related in particular to BNL bc, CIB and BancWest;
2019 Full Year Results | 86
Corporate Centre - 2019
1. See new quarterly series published on 29 March 2019, FHB no more fully consolidated from 1st August 2018; 2. Related in particular to the integration of Raiffeisen Bank Polska and the discontinuation or restructuring of certain businesses (in particular BNP Paribas Switzerland); 3. Related in particular to BNL bc, Asset Management and BancWest; 4. 5.2% residual stake in SBI Life
Reminder: Contribution of First Hawaiian Bank (FHB) to the income statement reallocated retroactively to the Corporate Centre effective from 1st January 20181
• 2018 reminder: revenues (€359m), operating expenses (€189m) and cost of risk (€13m)
Number of Shares excluding Treasury Shares (end of period) 1,249 1,248
Average number of Shares outstanding excluding Treasury Shares 1,248 1,248
in millions 31-Dec-19 31-Dec-18
Average number of Shares outstanding excluding Treasury Shares 1,248 1,248
Net income attributable to equity holders 8,173 7,526
Remuneration net of tax of Undated Super Subordinated Notes -414 -367
Exchange rate effect on reimbursed Undated Super Subordinated Notes -14 0
Net income attributable to equity holders, after remuneration and exchange rate effect on Undated Super Subordinated Notes 7,745 7,159
Net Earnings per Share (EPS) in euros 6.21 5.73
2019 Full Year Results | 91
Capital Ratios and Book Value Per Share
Capital Ratios
Book value per Share
in millions of euros 31-Dec-19 31-Dec-18
Shareholders' Equity Group share 107,453 101,467 (1)
of which changes in assets and liabilities recognised directly in equity (valuation reserve) 2,145 510
of which Undated Super Subordinated Notes 8,689 8,230 (2)
of which remuneration net of tax payable to holders of Undated Super Subordinated Notes 90 77 (3)
Net Book Value (a) 98,674 93,160 (1)-(2)-(3)
Goodwill and intangibles 11,669 12,270
Tangible Net Book Value (a) 87,005 80,890
Number of Shares excluding Treasury Shares (end of period) in millions 1,249 1,248
Book Value per Share (euros) 79.0 74.7
of which book value per share excluding valuation reserve (euros) 77.3 74.3
Net Tangible Book Value per Share (euros) 69.7 64.8
(a) Excluding Undated Super Subordinated Notes and remuneration net of tax payable to holders of Undated Super Subordinated Notes
31-Dec-19 31-Dec-18
Total Capital Ratio (a) 15.5% 15.0%
Tier 1 Ratio (a) 13.5% 13.1%
Common equity Tier 1 ratio (a) 12.1% 11.8%
(a) CRD4, on risk-weighted assets of € 669 bn as at 31.12.19 and € 647 bn as at 31.12.18
2019 Full Year Results | 92
in millions of euros 31-Dec-19 31-Dec-18
Net Book Value 98,674 93,160 (1 )
of which changes in assets and liabilities recognised directly in equity (valuation reserve) 2,145 510 (2)
of which 2018 div idend 3,768 (3)
of which 2019 div idend distribution assumption 3,871 (4)
Permanent shareholders' equity, not revaluated (a) 92,658 88,882 (1)-(2)-(3)-(4)
Goodwill and intangibles 11,669 12,270
Tangible permanent shareholders' equity, not revaluated (a) 80,989 76,612
(a) Ex cluding Undated Super Subordinated Notes, remuneration net of tax pay able to holders of Undated Super Subordinated Notes and after div idend
distribution assumption
Return on Equity and Permanent Shareholders’ Equity
Calculation of Return on Equity
Permanent Shareholders’ Equity Group share, not revaluated
in millions of euros 31-Dec-19 31-Dec-18
Net income Group share 8,173 7,526
Remuneration net of tax of Undated Super Subordinated Notes and exchange effect -428 -367
Net income Group share used for the calculation of ROE/ROTE 7,745 7,159
Average permanent shareholders' equity, not revaluated (a) 90,770 87,257
Return on Equity (ROE) 8.5% 8.2%
Average tangible permanent shareholders' equity, not revaluated (b) 78,801 74,901
Return on Tangible Equity (ROTE) 9.8% 9.6%
(a) Average Permanent shareholders' equity: average of beginning of the year and end of the period, including notably annualised net income with exceptional items, contribution to SRF and taxes not
annualised (Permanent Shareholders' equity = Shareholders' equity attributable to shareholders - changes in assets and liabilities recognised directly in equity - Undated Super Subordinated Notes -
remuneration net of tax payable to holders of Undated Super Subordinated Notes - dividend distribution assumption);
(b) Average Tangible permanent shareholders' equity: average of beginning of the year and end of the period, including notably annualised net income with exceptional items, contribution to SRF and taxes
Liquidity Coverage Ratio and Immediately available liquidity reserve
(a) Liquid market assets or eligible to central banks (counterbalancing capacity) taking into account prudential standards, notably US standards, minus intra-day payment systems needs
(a) Stage 3 provisions; (b) Impaired loans (stage 3) to customers and credit institutions, on-balance sheet and off-balance sheet, netted of guarantees received, including debt securities measured at amortized costs or at fair value through shareholders' equity (excluding insurance)
(a) Impaired loans (stage 3) to customers and credit institutions, not netted of guarantees, including on-balance sheet and off-blance sheet and debt securities measured at amortized costs or at fair value through shareholders' equity; (b) Gross outstanding loans to customers and credit institutions, on-balance sheet and off-blance sheet and including debt securities measured at amortized costs or at fair value through shareholders' equity (excluding insurance)
€bn 31-Dec-19 31-Dec-18
Liquidity Coverage Ratio 125% 132%
Immediately available liquidity reserve (a) 309 308
€bn 31-Dec-19 31-Dec-18
Allowance for loan losses (a) 17.1 19.9
Doubtful loans (b) 23.1 26.2
Stage 3 coverage ratio 74.0% 76.2%
31-Dec-19 31-Dec-18
Doubtful loans (a) / Loans (b) 2.2% 2.6%
2019 Full Year Results | 94
Common equity Tier 1 Ratio
1. CRD4; 2. Subject to the approval of the Annual General Meeting on 19 May 2020; 3. Including Prudent Valuation Adjustment; 4. New SSM general requirement
Common equity Tier 1 ratio1
(Accounting capital to prudential capital reconciliation)
€bn 31-Dec-19 30-Sep-19 31-Dec-18
Consolidated Equity 111.8 111.6 105.7
Undated super subordinated notes -8.7 -9.7 -8.2
2018 div idend -3.8
2019 project of div idend distribution -3.92
-3.0
Regulatory adjustments on equity3 -2.0 -2.1 -1.2
Regulatory adjustments on minority interests -2.6 -2.6 -2.5
Goodwill and intangible assets -11.4 -11.3 -12.2
Deferred tax assets related to tax loss carry forwards -0.4 -0.4 -0.6
Other regulatory adjustments -1.0 -0.8 -0.6
Deduction of Irrevocable payments commitments4 -0.6 -0.6 -0.5
1. Debt qualified prudentially as Tier 1 booked as subordinated debt or as equity
Senior Secured
Debt: 27
Preferred Senior Debt: 80
Subordinated Debt: 18
Tier 11: 10
Non Preferred Senior
Debt: 40
2019 Full Year Results | 96
Medium/Long Term Wholesale Funding 2020 Programme
2020 MLT regulatory issuance plan: €17bn
• Out of which capital instruments: €4bn
• Tier 2: €1bn issued on 08.01.20, 12NC72,
at mid-swap+120 bp
• Out of which Non Preferred Senior debt: €13bn
• $2bn (€1.8bn), issued on 06.01.20, 11NC10,
US Treasuries+125 bp
• £850m (€1bn) 7.9Y issued on 07.01.20,
UK Treasuries+130 bp
• AUD 300m (€185m), issued on 10.01.20, 7.5Y fixed
and floating rate notes dual tranche,
2.50% s.a. coupon / 3mBBSW +135 bp
1. Subject to market conditions, indicative amounts; 2. 12-year maturity, callable on year 7 only
Over 25% of the regulatory issuance plan realised as of end of January 2020
2020 MLT wholesale funding programme1: €35bn
Other senior debt: €18bn • Structured products (Preferred Senior): ~€15bn
• Secured funding and local wholesale funding:
~€3bn
2019 Full Year Results | 97
TLAC requirement as at 31.12.19: 6% of leverage
ratio exposure
TLAC Ratio above the requirement, 2020 target of 21%
already reached in 2019 without the senior preferred
allowance
TLAC requirement as at 31.12.19: 20.17% of RWA
• Including capital conservation buffer, GSIB buffer and
countercyclical capital buffer
BNP Paribas TLAC ratio as at 31.12.19 1:
21.5% of RWA2:
Total capital of 15.5% as at 31.12.19
6.0% of Non Preferred Senior debt3
7.3% of leverage ratio exposure2
1. In accordance with Regulation (EU) No. 2019/876,article 72ter paragraphs 3 and 4, some preferred senior debt instruments (amounting to EUR 18,294 million as at 31 December 2019) are eligible within the
limit of 2.5% of risk-weighted assets. 2. TLAC ratio reaches 21.5% of RWA and 7.3% of leverage ratio exposure, without the above Senior Preferred allowance. Should BNP Paribas use this option, the TLAC
ratio would reach 24.0% of RWA. 3. Principal amount outstanding and other regulatory adjustments, including amortised portion of Tier 2 instruments with residual maturity over 1 year ;
TLAC
requirement
as at 31.12.19
TLAC ratio excluding buffers
Conservation buffer
G-SIB buffer
Countercyclical buffer
Total capital ratio
Non Preferred Senior debt3
BNP Paribas TLAC ratio
as at 31.12.19
Senior
Preferred
24.0%
16.00% 15.5%
2.50% 6.0%
1.50%
2.50%
0.17%
21.5% 20.17%
2019 Full Year Results | 98
Variation in the Cost of Risk by Business Unit (1/3)
Total Capitalization and Medium-to-Long Term Indebtedness .. 252,525 227,502
(1) Prior to 30 September 2018, the Group presented its consolidated capitalization and medium-to-long term indebtedness
using the accounting scope of consolidation. Since then, the Group presents its capitalization table using the prudential
scope of consolidation. As stated in Section 5.2 of the BNPP 2018 Registration Document, the material differences
between the prudential scope of consolidation and the accounting scope of consolidation are the following:
o insurance companies (primarily BNP Paribas Cardif and its subsidiaries) that are fully consolidated under the
accounting scope of consolidation are accounted for under the equity method in the prudential scope of
consolidation;
o jointly controlled entities (mainly UCI Group entities and Bpost banque) are accounted for under the equity method
in the accounting scope of consolidation and under the proportional consolidation scope in the prudential scope of
consolidation.
(2) All medium- and long-term senior preferred debt of the Issuer ranks equally with deposits and senior to the new
category of senior non preferred debt first issued by the Issuer in January 2017. The subordinated debt of the Issuer is
subordinated to all of its senior debt (including both senior preferred and senior non preferred debt). The Issuer and its
subsidiaries issue medium- to long-term debt on a continuous basis, particularly through private placements in France and
abroad.
Euro against foreign currency as at 31 December 2017, CAD =1.506, GBP = 0.889, CHF = 1.171, HKD = 9.387, JPY =
135.303, USD = 1.201.
Euro against foreign currency as at 31 December 2018, CAD = 1.563, GBP = 0.898, CHF = 1.126, HKD = 8.972, JPY =
125.594, USD = 1.146.
Euro against foreign currency as at 31 December 2019, CAD = 1.457, GBP = 0.847, CHF = 1.085, HKD = 8.732, JPY =
121.903, USD = 1.122.
(3) At 31 December 2019, the remaining subordinated debt included €498 million of undated floating-rate subordinated
notes (TSDIs).
(4) Undated participating subordinated notes issued by BNP SA in July 1984 for a total amount of €337 million are
redeemable only in the event of the liquidation of the Issuer, but may be redeemed in accordance with the terms specified
in the French law of 3 January 1983. The number of notes outstanding as at 31 December 2019 was 1,434,092 amounting
to approximately €215 million. Payment of interest is obligatory, but the Board of Directors may postpone interest
payments if the Ordinary General Meeting of shareholders held to approve the financial statements notes that there is no
income available for distribution. Additionally, as at 31 December 2019, there were 28,698 undated participating
subordinated notes issued by Fortis Banque France (amounting to approximately €4 million) and 6,773 undated
participating subordinated notes issued by Banque de Bretagne (amounting to approximately €2 million) outstanding; both
entities have since been merged into BNPP.
(5) Subordinated debt corresponds to an issue of Convertible And Subordinated Hybrid Equity-linked Securities
(CASHES) made by Fortis Bank SA/NV (now acting in Belgium under the commercial name BNP Paribas Fortis) in
December 2007, for an initial nominal amount of €3 billion, which has now been reduced to an outstanding nominal
amount of €948 million corresponding to a market value of €773 million at 31 December 2019. They bear interest at a
floating rate equal to three-month EURIBOR plus a margin equal to 2% paid quarterly in arrears. The CASHES are
undated but may be exchanged for Ageas (previously Fortis SA/NV) shares at the holder’s sole discretion at a price per
Ageas share of €239.40. However, as of 19 December 2014, the CASHES are subject to automatic exchange into Ageas
shares if the price of Ageas shares is equal to or higher than €359.10 for twenty consecutive trading days. The principal
amount will never be redeemed in cash. The rights of CASHES holders are limited to the Ageas shares held by BNP
Paribas Fortis and pledged to them.
Ageas and BNP Paribas Fortis have entered into a Relative Performance Note (RPN) contract, the value of which varies
contractually so as to offset the impact on BNP Paribas Fortis of the relative difference between changes in the value of the
CASHES and changes in the value of the Ageas shares.
On 7 May 2015, BNPP and Ageas reached an agreement which allows BNPP to purchase outstanding CASHES subject to
the condition that these are converted into Ageas shares, leading to a proportional settlement of the RPN. The agreement
between Ageas and BNPP expired on 31 December 2016 and has not been renewed.
On 24 July 2015, BNPP obtained a prior agreement from the European Central Bank permitting it to purchase outstanding
CASHES up to a nominal amount of €200 million. In 2016, BNPP used such agreement to purchase €164 million
outstanding CASHES, converted into Ageas shares.
On 8 July 2016, BNPP obtained a new agreement from the European Central Bank which superseded the prior agreement
permitting it to purchase outstanding CASHES up to a nominal amount of €200 million. BNPP requested the cancellation
of this agreement from the European Central Bank and the European Central Bank approved such cancellation in August
2017.
As at 31 December 2019, the subordinated liability is eligible to Tier 1 capital for €205 million (considering both the
transitional period and the cancellation of the aforementioned agreement).
(6) Carrying amount of the CASHES, of which the amount eligible in prudential own funds was €205 million as of 31
December 2018 and €205 million as of 31 December 2019.
(7) Consists of numerous issuances by BNPP in various currencies (i) over the 2005-2009 period, of undated deeply
subordinated non cumulative notes and (ii) since 2015, of perpetual fixed rate resettable additional tier 1 notes. The details
of the debt instruments recognized as capital, as well as their characteristics, as required by Implementing Regulation No.
1423/2013, are available in the BNP Paribas Debt section of the Issuer’s investor relations website at
www.invest.bnpparibas.com.
(8) At 31 December 2019, the Issuer’s share capital stood at €2,499,597,122 divided into 1,249,798,561 shares with a par
value of €2 each."; and
(b) by the insertion of the following sub-section immediately beneath the sub-section "19. Events
impacting the solvency of BNPP" on page 1553 of the Base Prospectus:
"20. Declaration concerning the unaudited results of BNP Paribas for the periods ending 31
December 2019
The statutory auditors have audited the financial statements of BNP Paribas for the years
ended 31 December 2017 and 31 December 2018. They have also reviewed the condensed
interim consolidated financial statements of BNP Paribas as of and for the six month period
ended 30 June 2019. The French statutory auditors carry out their engagements in
accordance with professional standards applicable in France.
In relation to the press release published by BNP Paribas on 5 February 2020 on its 2019
annual results and fourth quarter 2019 results, in application of the paragraph 8.2 of the
ANNEX XI to the COMMISSION REGULATION (EC) N° 809/2004, BNPP has made the
following statements:
(a) BNP Paribas approves this information;
(b) the statutory auditors have agreed that this information is substantially consistent
with the final figures to be published in the next annual audited financial statements;
and
(c) this financial information has not been audited.".
RESPONSIBILITY STATEMENT
I hereby certify on behalf of BNPP and BNPP B.V. having taken all reasonable care to ensure that such is the
case that, to the best of my knowledge, the information contained in this Fourth Supplement is in accordance
with the facts and contains no omission likely to affect its import.
BNP Paribas
16 boulevard des Italiens
75009 Paris
France
Represented by Michel Konczaty
in his capacity as Deputy Chief Operating Officer
Dated 28 February 2020
In accordance with Articles L. 412-1 and L. 621-8 of the French Code monétaire et financier and with the
General Regulations (Règlement général) of the French Autorité des marchés financiers ("AMF"), in
particular Articles 212-31 to 212-33, the AMF has granted to this Fourth Supplement the visa n° 20-062 on 28 February 2020. This Fourth Supplement has been prepared by BNPP and BNPP B.V. and BNPP's signatories assume responsibility for it on behalf of BNPP and BNPP B.V., provided that BNPP B.V. accepts
no responsibility for the information contained in the SREP Press Release, the press release and related
presentation dated 5 February 2020, the updated disclosure in relation to BNPP or the BNPP 2019 Unaudited
Financial Statements. In accordance with Article L. 621-8-1-I of the French Code monétaire et financier, the
visa has been granted following an examination by the AMF of "whether the document is complete and
comprehensible, and whether the information in it is coherent". The visa does not imply that the AMF has
verified the accounting and financial data set out in this Fourth Supplement and it does not mean that any
financial transactions that may be issued pursuant to the Base Prospectus (as amended by the Previous
Supplements and this Fourth Supplement) have been granted approval by the AMF. This visa has been
granted subject to the publication of Final Terms in accordance with Article 212-32 of the AMF's General
Regulations, setting out the terms of the securities being issued.